Whither Obamacare, Now That "It's the Law of the Land?"

While a roll-back of Obamacare now is about as likely as spotting gargoyle statuettes among the DMCB spouse's holiday decor, a recent New England Journal article points out that the Affordable Care Act (ACA) - even if it is the law of the land - still has a very bumpy road ahead.

That's because of four key issues:

1. The States can still knot things up by forcing Washington DC to run the Health Insurance Exchanges (HIEs).  It's very possible that Uncle Sam won't pull them off on time and, what's more, there's a credible Supreme Court challenge looming over Obamacare's potential lapse in extending tax credits to the federally-run HIEs.

2. States can refuse the Medicaid expansion. While their statewide hospital associations are very  unhappy about that, Governors are either ideologically opposed or just plain wary of additional downstream costs. This could result in additional millions of uninsured, especially in the conservative "red" states.

3. Health care cost inflation is likely continue its upward spiral.  Congress, no matter how CMS' payment innovations turn out and no matter how much it wants to curtail costs, is unlikely to withstand the lobbying from all corners of medical-industrial complex involving thousands of pages of rules and regulations.

4. Deep public ambivalence about the law will continue. That means that as Congress and the President look for ways to control the Federal deficit, Obamacare is especially vulnerable. Unlike Social Security or Medicare, the ACA's "patchwork" of insurance reforms is headed toward the fiscal cliff without a strong supportive constituency. Before Congress even touches Medicare, it's far more likely to cut Obamacare. The first hit could be those insurance tax subsidies mentioned above.

Stuff Their Mouths with Gold

The Disease Management Care Blog uncovered this confidential memo, presumably authored by a health insurance CEO to the company's senior management team. Any resemblance to reality or perception is purely intentional.

DATE: November 18, 2015

TO: Senior Management

FROM: The Office of the CEO

RE: Our recent White House meeting on the individual mandate

As many of you are aware, I and other commercial insurance CEOs visited White House to barnstorm over ways to help President Obama out of his latest political pickle.  While, like you, I was caught off-guard by the President's "I hear you loud and clear" proclamation, our trade association CEO, Karen Ignagni, was once again masterful in helping us understand the big picture.  I wish to share that information with you.

1. Remember that the Affordable Care Act (ACA) is a commercial insurance gold-laying goose. Millions of Americans are being forced to buy our products, and a lot of them will be subsidized by the faith and credit of the Federal government. While the President will use every opportunity to deflect any blame on us, we must remember: eye on the prize, people!

2. While we would naturally prefer that, effective January 1 2015, our customers move from the skimpy lower margin individual plans to the richer and more profitable "essential health benefit" plans, Ms. Ignagni anticipated that the amateurs advising the President would lead to him to having to make stuff up on the fly.  Think of this as the price of doing business.
 
3. While many of you will be working long hours through the upcoming holidays to un-disenroll the hundreds of thousands of insureds that got our cancellation nastygrams, let me assure you that getting it right most, not all of the time is our new business mantra.  Sure, thousands of persons will allege that that they thought they were covered with X deductible for Y condition, but we can clean that up after the fact through the standard appeal process.  Hey, it's right there on the White House web site.

4. It's no accident that Ms. Ignagni described our White House meeting as "very productive."  While the details cannot be shared with you, as many of you know, the ACA allows for certain "risk corridor offsets" to be made if there are early death spirals in the mandated minimum benefit plans.  While opponents of the ACA will attempt to undermine those costly offsets in the upcoming government budget battles, we're hopeful that politicians on both sides of the aisle will ultimately recognize that it's not our fault that the White House's insights on health insurance is about as deep as Toronto Mayor Rob Ford's awareness of the perils of crack.

5. We must remain quiet and outside the public eye. While all of us are appalled at the Administration's blunders, the last thing we want to do is to remind our Democratic allies about the "public option."  If we are approached by the media, let's recall that Aneurin Bevan, the founder of the National Health Service, neutralized the opposition of Britain's doctors by "stuff[ing] their mouths with gold." The ACA is our gold and let's keep our dismay out of sight and our mouths silent. 

The High Price of High Deductible Plans and the Potential Role of Population Health Management

Your bronze plan ticket to health care?

Should patients be forced to reach a spending threshold before their insurance kicks in? At first glance, it makes sense, because health consumers' "skin in the game" forces them to think twice before going to the emergency room for a sore throat, or an orthopedic surgeon for simple back pain.

Wharam and colleagues examine the science behind high deductible insurance in this just-written article in the New England Journal.

And the science says there is a lot we do not know.

Once insurance risk is monetized into premiums, policymakers as well as insurers are operating in the dark about calculating the right deduction for a given income level. One example is Cover Oregon's $5000 deductible for persons who are at 200% to 400% of the federal poverty level. That means a family with a yearly income as low as $47,000 would have to spend more than 10% of their income on health care before seeing a dime of insurance coverage.

"Egads," says the DMCB.

Given that stark reality, the challenge is to figure out how an up-front deductible influences "buying behavior" once persons get sick. Unfortunately, most of the research out there is on the impact of relatively "small" amounts of out-of-pocket expenses on health care utilization, especially in low-income populations. The bad news is that lay-persons - who are unable to discern the difference between a simple headache vs. a brain tumor - tend to "indiscriminately" lower all utilization as their cost sharing goes up.

There has also been no research on the impact of high deductible plans on mortality or chronic condition control.

Concluding that the U.S. is "poorly prepared" for what will happen under Obamacare's bronze high deductible plans, Wharam et al recommend there be more research on the topic.  Pending that, they suggest consumers be educated about their insurance purchases and be encouraged to chose low-deductible plans. They note that the star-crossed insurance exchanges (once they're fixed) can be configured to help do that. When there is employer-based insurance, employers could be encouraged to make the deductibles more proportional to income. In addition, health savings accounts could also help.

While the authors don't use the words "population health management," they tap this discipline as one solution to this Obamacare problem. They point out that predictive modeling/risk stratification can be used to create "personalized" insurance designs that optimize high-risk patients' access to care. Patients in these plans could have access to decision-aids and coaching that help them figure out when it's a simple headache and then they should seek medical care.

Valuable Personal, Political and Health Reform Lessons, Courtesy of the Federal Government Shutdown

Coming to consensus
the old fashioned way

The Disease Management Care Blog views the federal government shutdown with the same morbid fascination of watching personal injury lawyers justify their double digit malpractice suit contingency fees: it's so awful, it's hard to look away.

The good news is that that doesn't mean that the shutdown doesn't hold some important personal and political lessons.  They can make DMCB readers better citizens and our political class a credit to our Republic. 

To wit......

When the DMCB spouse expresses consternation over the boneheaded actions of her husband, the DMCB can now respond by:

1. changing the subject,
2. retreating to the DMCB World Headquarters and blogging about the spouse's unreasonableness,
3. referring to the alleged lapse as a "glitch."

Things don't go well in the opening day of a widely anticipated unveiling of the largest health care achievement in the history of the United States.  If you were in charge, you would respond to the health insurance exchange breakdown by:

1. recognizing the problem and promising to fix it,
2. reminding the public about the painful gap between lofty campaign promises and disappointing bureaucratic reality,
3. shrewdly drawing flattering comparisons to Apple, the most widely admired brand in the world.

As the leader of a political coalition, you are stymied by the division of powers in the world's longest lasting democracy.  In response you:

1. seek consensus
2. deploy ad hominem attacks in press conferences
3. offer to compromise by allowing the opposition to do things your way.

Wanting to be an informed member of the electorate, you regularly watch either CNN, FOX News, MSNBC, PBS, CBS, NBC or ABC because:

1. These broadcasts' news editors subtly frame their closed information loops to meet your own political biases,
2. You haven't discovered BBC or Al Jazeera
3. There aren't any movies on TV featuring svelte vixen vampire babes having their way with their mesmerized male victims.

By pointing out that Obamacare is "the law of the land," you are really saying:

1. Our representative democracy passed legislation that was signed by the President and upheld by the Supreme Court, so get over it,
2. Now wait a minute, our representative democracy can modify or even roll back health care laws.
3. Enough with the debate, time to move on and figure out how to make preschool education, low interest mortgages and low-fat frozen yogurt protected federal entitlements.

Being a Game of Thrones fan, you wonder if the following might not be useful in settling the budget impasse:

1. Asking what the honorable Ned Stark would do, until you recall that he was beheaded.
2. Invite the opposition to a Red Wedding
3. Call up your elected representative and say "Hodor!"
4. Call up your elected representative and hear him or her say "Hodor!"

Everything You Need to Know About Health Care Reform, Thanks to a 25 Minute Video, Courtesy of Managed Care Magazine

Thanks to Managed Care Magazine, the Disease Management Care Blog can post this interesting 25 minute interview with Princeton healthcare economist Uwe Reindardt.  Suitable for desk-bound meal-break viewing by overachieving DMCB readers, the modest and insightful Dr. Reindardt gets it mostly right:

No, the slowdown in the U.S. rate of health care costs cannot be ascribed to passage of the Affordable Care Act.  It started wayyyy before Obamacare was passed and is more likely due to the economic slowdown and increased consumer cost-sharing.

Accountable Care Organizations remain an "iffy" experimental proposition because they "don't go all the way like Kaiser."

Republican proposals to let health insurers sell their products across state lines are hardly a health reform panacea, because prices (and therefore premiums) are not a function of where the insurer is domiciled, but where the care is rendered.  Texas insurers would still have to pay New York prices.

Americans use fewer pills, occupy less bed-days and see fewer doctors, but we pay more because providers can charge more.  Despite being relatively small vs. the behemoths like Aetna and Cigna, regional hospitals have considerable market power that translates into take-it-or-leave it local single seller monopsonies.   Europeans, in contrast, have lower prices because their system is dominated by single purchaser monopolies.

We're headed toward a three-tier system comprised of 1) the indigent safety-net public programs, 2) the middle class "reference pricing" "networks" where consumers pay the difference if they want to buy up and 3) "boutique" health care for the 5%.

There's reason to be optimistic about the next five years thanks to a sluggish labor market (making it easier to impose networks and even more cost sharing) and innovation (computational capacity is putting meaningful quality measurement within reach, while techy gizmos are making self-care simultaneously cheap and fun). 

Plus, there's reason to be of good cheer.  Compared to the U.S. education and the legal systems, health care is far more efficient and consumer-friendly.  Stop beating up on yourselves.

(The DMCB didn't quite agree with Dr. Reinhardt's views on worksite wellness.  He finds the notion counterintuitive and intrusive, preferring that insurers own wellness.  He neglects to mention that the employers who invest heavily in wellness are typically self-insured and that employers have an arguable stake in improving the quality of their human capital.)

How Badly Obamacare Beat Up On the Health Insurers, and What Does It Mean for the Individual Market

D.C. deals with health insurers

As Disease Management Care Blog readers are aware (for example, here and here), Obamacare forces health insurers to spend at least 80% (small group) to 85% (large group) of their premium income on health care, leaving only 15% for "other," including administrative overhead and profits. If that 80%-85% "medical loss ratio" (MLR) threshold is not met, insurers have to rebate the difference to their customers.

 While the White House has been happy to extoll the millions of dollars that were repaid to consumers (even though the individual checks were hardly eye-popping and then there is the risk that they're taxable), the DMCB is interested in what actually happened to the commercial insurers.  Did they game the system and garner even higher profits?  Or, have they gotten their comeuppance, are now losing money and have to pursue other lines of business, like covering zombie attacks?

This article in the latest Health Affairs looked at that impact of the law when it went into effect on January 1, 2011.  The authors used NAIC data to examine the impact on the individual (N=1,219), small group (N=804) and large group market (N=750) insurers.

Individual, small group and large group numbers are broken out below. If there is a *, the change is statistically significant.

In the individual market, from 2010 to 2011:

Median medical expenses, as a percent of premium, increased      by 5.5%*.
Administrative expenses, as a percent of premium, decreased            by 2.6%*.
Profit (otherwise known as "operating margin" or the bottom line) decreased by 1.3%*. "For profit" insurers fared even worse, with a decline in operating margin of 2.2%* vs. their nonprofit competition with a decline in 0.8%.

2011 operating margins were overall negative:

Individual overall -0.1%.
Nonprofits:  -3.5%.
For profits:  0.4%.

In the small group market:

Median medical expenses increased by 0.7%.
Median administrative expenses declined by 1%*.
The bottom line increased by .5%. Nonprofits saw an increase of 1.2%* vs. the for profits having a small decline of .3%.

2011 operating margins were positive, ranging from 2.8% to 3.8%  across the non and for profits, respectively.

In the large group market:
Median medical expenses declined by 0.7%.
Median administrative expenses declined by 0.9%%*.
Profit increased by .7%*. Nonprofits saw an increase of 0.1%* vs. the for profits having a increase of 1.2%.

2011 operating margins were positive, ranging from .7% to 2.6%  across the non and for profits, respectively.

The DMCB's take:

Obamacare had a single digit impact on health insurers.  More was spent on health care and less was spent on administrative costs.  While the shifts were relatively small, those changes represent swings of hundreds of millions of dollars to the bottom line in an already thin margin business. If the purpose of Affordable Care Act was to beat up on the health insurers, it was more of a push than a shove.

Small and large group profitability increased and operating margins were positive, while the individual market struggled. As readers may recall, the inability of individuals to obtain coverage at any price was a big factor in the eventual passage of the Affordable care Act. While the future individual market may eventually benefit from an influx of healthy young "invincibles" armed with an accompanying bolus of insurance subsidies, Obamacare ironically hurt the individual market in 2011. If health care utilization didn't go down in 2011 as a result of the economy, it could have been a lot worse.

That tells the DMCB that, contrary to the insurers' reports of doom and gloom, the 80%-85% MLR rule hasn't been a catastrophe.  On the other hand, it hasn't been good news for the individual market.  If the young invincibles don't 1) respond to the individual mandate, 2) use functioning insurance exchanges and 3) sign up, it could portend further stress on that sector of the health care economy.  No wonder the Obama Administration is pushing that so hard.

A Brainy Health Wonk Review on Health Reform, the Affordable Care Act and Lots More!

Welcome to the Disease Management Care Blog, your host for this edition of the Health Wonk Review. This is a linked summary of the latest and best postings from an informal community of health policy bloggers with informed insights that readers, business leaders, academics and policymakers won't find anywhere else. We invite you to sit back, get a beverage, enjoy a snack and feed your brain as you join thousands of your colleagues and competitors in gaining a deeper understanding of the U.S. health care system.

When when when (of a miscellaneous nature)

When researchers act like politicians: The falsification, fabrication and plagiarism that comprises research misconduct is the topic of a post by Donald Kornfled over at the delightfully named Wing of Zock. Causes include the fear of failure, perfectionism, ethical lapses, grandiosity and psychopathy. Dr. Kornfield reviews potential fixes, including training courses, better mentorship with monitoring and protections for whistleblowers.

When for-profits run amok: Roy Poses at Health Care Renewal scrutinizes one health care system's latest branding campaign and acquisitions, pointing out that the lack of any specificity seems to confirm that this is all about profits, not patients; commoditization, not caring; and corporatization, not community.  Unfortunately, this is not an isolated incident.  You've been warned.

When outcomes are based on flawed research: David Williams of the Health Business Blog asks Al Lewis why no one believes the numbers that underlie the reported effectiveness of population health management, the medical home and wellness. It's easy, says Al: the math has been unnecessarily complicated, actuaries make mistakes and there's selection bias, regression to the mean, confounders. pressure to show success and, most of all, a widespread and regrettable under-recognition of Al's vast expertise.

No Health Wonk Review is Complete Without the Affordable Care Act

Will it never end? If you're interested in even more obscure legal theorizing over the constitutional legitimacy of the Affordable Care Act, then head on over to the Health Affairs Blog. It appears the ACA may only authorize consumer subsidy tax credits in "state" run exchanges. The failure to include federal exchanges in the legislation could be a pesky wording oversight (argued here by Timothy Jost) that is overcome by a common sense understanding of Congress' original intent, or a craftily worded way of giving the states one more incentive to open their own exchanges (argued here by Michael Canon and Jonathan Adler) that could backfire and conveniently hobble the roll-out of the exchanges.

If you had to pick one good thing about the ACA, would this be it? Have you heard about the ACA's insurance co-ops? Think of these as smaller regional not-for-profit health insurance plans that are sponsored by consumer-based organizations. Jay of the Colorado Health Insurance Insider describes how, thanks to a loan from Uncle Sam, a new rural co-op is being launched in Colorado. It plans to open its doors in 2015 with a target of 10,000 enrollees.

And if you wanted to convince skeptical voters about the rest of the ACA, Anthony Wright of the Health Access Blog reminds us that the Brits proudly featured their National Health Service (NHS) in the Olympic Opening Ceremony for lots of good reasons.  The conservative DMCB not only wonders what marketing lessons CMS can learn from this (hint: opening ceremony at the World Series) but it has had its wacky closet Tea Party fears confirmed: "ACA" spelled backwards is "NHS" and its Maximum Kommissar will be First Citizen Don Berwick.

Massachusets reminds of what could follow the ACA: David Harlow of the HealthBlawg looks at what the Bay State is doing now that Romneycare's reforms neglected to tame health care cost inflation: Regulations that prohibit excessive provider price increases,promotion of the medical home and ACOs, greater market transparency, more public financing and physician liability reforms.

And what do the brokers think of the ACA? Hank Stern of the InsureBlog describes a blow back on the insurance provision that excess administrative costs must be rebated back to the beneficiaries.  Not only is it very burdensome to calculate in group policies with individual underwriting, but the tax implications are best considered in a "Michelob teaching moment" (that'll make more sense when you read the entire post, but trust the DMCB: it's not good).

Accountable Care Organizations?  Amazingly, only one HWR submission!

Is the DMCB really a DmCB?  DMCb?  Kerry Willis of the Health Talent Transformation blog calls on docs to resist the siren call of the ACOs' easy money. Look closely, he says, and you'll notice a strong resemblance the 1990s-style PHOs that were long on hospitals' interests and short on physicians' needs. He suggests that a better name would have been pHO. That's why he says unless ACOs use the physician-led patient centered medical home or concierge practices, a better name for them would be AcO.

Of Budgets, Priorities (and their evil architects)

In the taxpayers-get-what-they-pay-for-department, Liz Borkowsi of ScienceBlogs reviews a Health Affairs study on physicians' willingness to care for coming wave of new Medicaid beneficiaries. Based on a representative sample of docs, 69% are currently accepting such patients, but the numbers vary by geography (the rate is only 40% in New Jersey, for example).  The researchers estimate increasing payment rates to match Medicare's fee schedule would likely increase acceptance by an average of 10 points. One solution is expanding the nation's 8000 community health centers with the $11 billion allocated by the ACA. Unfortunately, that money has been a tempting target for budget-deficit minded politicians.

...and here's more on the taxpayers-get what-they-pay-for: Jason Shafrin of the Healthcare Economist blog looks at Medicare's reimbursement for for Alaskan physicians and finds evidence that new and established Medicare beneficiaries are having trouble finding a primary care physician. It seems the physicians would rather fill their clinics with better paying commercially insured patients.  If that income stream ever gets cut off, thinks the DMCB, the docs could always turn to the remunerative world of blogging.

How about what patients don't want to pay for? Medical student Justin Jones examines end-of-life care and finds doctors who forgo aggressive treatment of their incurable cancers may be role models for the rest of us.  Yet, despite some compelling anecdotes and the disdain for death panels and cost considerations, the provocative DMCB still wonders how insurers and their risk-bearing providers will reconcile an obvious conflict of interest over death with dignity and reducing claims expense with upside gain sharing.

In the physicians get annoyed-on-how-they're-monitored department, everyone agrees we need to measure health care quality and make providers more accountable.  Unfortunately, making that happen in the real world is proving difficult. Brad Flansbaum of the Hospitalist Leader blog offers a quick primer on CMS' early efforts at physician report cards in Kansas, Iowa, Missouri and Nebraska and explores the pros and cons of measurement at the individual, group or hospital level.

Tough Choices: Chris Langston, the Program Director at the John A Hartford Foundation blog points out that the dysfunctional economics of Medicare and Medicaid are ethically troubling. Decreased payments for geriatric services are part of a troubling pattern of discriminating against the poor and elderly. He asks if it's time to recast the political debate over the current scope of government insurance as a beneficiary rights issue.

I knew it! Is Republican VP candidate Paul Ryan a real budget hawk, or is his record in Congress marred by the realpolitik of partisanship and party loyalty? Joe Paduda finds compelling evidence of the latter.

Want more dirt on Paul Ryan? Harold Pollack over at healthinsurance.org says he's "extreme," a "pampered millionaire known to purchase $350 wine" with proposals "opposed by huge middle class constituencies" that would lead "between 14 and 27 million low-income Americans to lose health coverage" and cause "deep" cuts in highway repair, K-12 education, environmental protection, public health and law enforcement."

Heroes vs. affordability: While the U.S. military has increased the visibility of post traumatic stress disorder (PTSD), Lynch Ryan of Workers Comp Insider blog reminds us that our nation's police force members are not immune. Cops are far more likely to die by their own hand than be killed in the line of duty, and their rate of suicide per 100,000 matches the U.S. army. Lynch explores the workman's compensation implications: should treatment of the disabling stress of witnessing violence be covered, or is this part of the job?

Your next host for the Health Wonk Review will be Louise Norris of the Colorado Health Insurance Insider Blog.

Insights on Delaying Obamacare's Employer Mandate: Four Potential Unintended Consequences?

Which is it?

Look at we did!

Delaying the employer mandate for one year is simply more evidence of Obamacare's unworkable complexity, says detractors.

The delay is flexibility and democracy in action, says supporters. 

The Disease Management Care Blog is troubled by how Congress and the Obama administration underestimated the complexity of the local implementation of a one-size-fits-all national health program.  It also knows that the White House needs some Affordable Care Act (ACA's) elbow room.

To gain a better understand what's going on, check out this article appearing in the New England Journal. 

Recall that the intent of the ACA was to preserve employer-based insurance while enabling individuals to access similar levels of coverage in on-line exchanges. Toss in some income-based subsidies on the upside along with IRS penalties on the downside, and the intended outcome is that millions of Americans will enter the national risk pools. That, in turn, should lead to premium drops and greater access to health care.

So what could be the impact of the delay?

First off, there's what won't happen. The authors estimate that 2015 will be business-as usual for the vast majority of persons with employer-based insurance.

But here's four things that could happen:

1. Approximately 5 million part-time workers may be closed out from access to their employer's insurance for another year. In addition, the $10 billion in government income from the $2000-per-worker) will be lost.  Both these numbers are small potatoes in a trillion-dollar enterprise involving tens of millions of workers, unless, of course, you happen to be one of those workers.

2. Millions of employed full time workers will continue to take a pass on taking the paycheck deduction for their employer-based insurance.  Whether they change their mind in 2015 will not depend on how hard their employers work to sign them up, but how aggressively the IRS pursues the individual mandate. 

3. Attached to the employer mandate were regulations that would have forced employers with a workforce of greater than 50 persons to offer competitive (read "low") insurance premiums.  Since that's also been delayed, employers and their employees who want insurance have an even greater incentive to access the on-line individual exchanges.  Employers get to reduce their insurance costs while individuals get to take advantage of those upside subsidies. The employer-employee win-win arrangement could not only undercut employer-based insurance, but "triple" the Fed's subsidy budget.

4. The DMCB's physician colleagues are not immune either.  There is emerging evidence that the individual exchanges are likely to offer "frugal" insurance plans.  Early indications are that these plans will turn to the old tricks of restricted networks and low provider reimbursement levels. This could result in millions of newly insured persons further stressing an overloaded primary care provider network.

Wecome to the Family, ACA

All big families go through this sooner or later. 

The upending of a familiar rhythm of behaviors, traditions, relationships and unspoken social rules by the unpleasant intrusion of one who is eumphemistically termed "a significant other." The disagreeable dolt who sleeps in.  The rude boyfriend who won't close his mouth when he chews. The unpleasant uncle who knows it all. In hushed whispers in the kitchen, the regulars wonder: just what in the world does she see in him?

Yet, even as families hope against hope that they'll break up, things settle into a new equilibrium. Loyalties evolve, the relatives adapt, newcomers behave and the traditions evolve. Yes, those were the good old days and he may be a horse's ass, but now he's our horse's ass.

Enter the Affordable Care Act. Whether we like it or not, the Supremes see something in this fat boy sitting in our living room and it looks like he's for keeps. The ACA may be unwieldly, expensive and prone to mischief, but it looks like he ain't going anywhere. Absent an unlikely Republican trifecta involving the Presidency, House and Senate (and that has to be filibuster proof) in the November elections, it looks like he'll be part of the family for years to come. 

Welcome to the family, ACA.

A Path Toward Further Health Reform Is Lined With the IRS?

As attention has shifted to phantom IRS emails, misbehaving Iraqis and our newfound national awareness of soccer's off-side rule, it's only natural for the Population Health Blog to wonder about the status of health reform.

Enter The New England Journal with a pair of perspectives on the coming prospects for the Affordable Care Act.

Over on the left, the Brooking Institution's Henry Aaron believes that, notwithstanding ascendant Republican hopes for the 2015 elections, Mr. Obama's veto power virtually guarantees the law's survival.  The only question is whether politics will get in the way of any adjustments.  Once we're into 2015 and beyond, these could include the mandate (weaken any penalties?), Medicaid (spending caps?), the states' roles (allow for local modifications?) and changing affordability standards (increasing income-based premium support for families).

Over on the right, the American Enterprise Institute's Joe Antos agrees there is no going back.  He offers up some potential conservative modifications for 2015 and beyond, such as shifting the insurance premium support to a defined contribution basis (versus a defined benefit), shielding mainstream health insurance by moving catastrophically ill persons to "high-risk" pools and requiring insurers (including Medicare) to leverage consumer education and incentives along with provider teaming to help steer beneficiaries toward lower-cost care options.

Drs. Aaron and Antos both agree that IRS-based enforcement rules may force significant changes.  Under current law, poor persons who underestimated future income for today's premium support calculations may be subject to claw-backs. According to Dr. Aaron, the IRS is responsible for administering that, and any payment would ultimately go to the insurer long after the fact.  Dr. Antos points out that the IRS's enforcement of the mandate could lead to the spectacle of tax refunds being withheld from low-income individuals and families.

The PHB is less sanguine.  While the PHB is no political pundit, the likely increase in the number of Republicans in Congress after 2015 combined with the kick-off of the 2016 Presidential race portends more of the same health reform gridlock. 

The only good news from Aaron and Antos is that growing antipathy toward the IRS may lead Congress to uncouple the IRS and it's enforcement mechanisms from the ACA. It may not be an example of pristine bipartisanship, but if it leads to necessary modifications of the ACA, that's not necessarily a bad thing.

Stay tuned!

Image from Wikipedia

France Says Affordable Care Act Is Seeking Asylum

En guarde for the ACA

Washington DC (DMCB) - The Affordable Care Act (ACA) sought refuge in the French Embassy today and has applied for political asylum, said U.S. officials.  France's Foreign Minister, Philipe deBird announced that the Act is now under the protection of the French government while it considers its obligations under international law.

The ACA has been appealing its numerous death sentences in U.S. courts and a final ruling is expected any day now from the U.S. Supreme Court. Many legal experts expect the Court to uphold many of the Appeal Courts' decisions, which could spell certain doom for the ACA.

Various members of Congress have denounced the Act as a threat to national security and have advocated for a remote drone attack.  "The dark references to 'severability' in speeches on the floor of the House of Representatives probably pushed the ACA over the edge" said DMCB legal expert Dawn Tzume.  "It's also no accident that the ACA chose the French Embassy, since they not only support free health care but smartly sport berets and stylishly drape their jackets over their shoulders, even when they are in Afghanistan" added Ms. Tzume.
 
Former State Department spokesperson Wanda Ostomy charged that France may use this incident to influence U.S. monetary policy.  "The French could easily deny asylum, putting the U.S. budget back in the dumpster," said Ms. Ostomy. "They'll probably 'suggest' that we convert to the Euro and use it to finance California's 2015 deficit," she added.

The DMCB contacted the White House for comment and was referred to Nancy Pelosi's office.  "We are studying the situation and let the President know what the next steps will be," said an unnamed person in Ms. Pelosi's office. 

"The ACA is at this moment enjoying some cheese, croissants and pear slices, courtesy of the French people," said Embassy spokesperson, Jean Claude deRash. "Many of our citizens are on holiday at this time of year and we wished to extend the same courtesy to our unexpected guest," he added.

The Disease Management Care Blog will continue to follow this developing story

Image from Wikipedia

The Politicizing of Preventive Health Care: Whither the US Preventive Health Services Task Force?

Here comes the camel nose!

Kudos to JAMA for tackling what the Disease Management Care Blog has been saying for years: now that the Washington DC's camel nose is under the tent, there is no way health insurance coverage - and the care it pays for - isn't going to become politicized.

That's the bigger issue in this just-published article by Steven Wolf and Doug Campos-Outcalt. They're focusing on the political pressure that is being brought to bear on US Preventive Services Task Force (USPSTF). As readers may recall, the Affordable Care Act requires health insurers to fully cover screening services that are deemed effective by the USPSTF. Drs. Wolf and Campos-Outcalt point out that politics rudely intruded on the USPSTF's determination that the evidence supporting mammography for women under age 50 years was lacking. The resulting firestorm not only prompted Congress to not only waive the USPHSTF recommendation, but led some of its members to question the Task Force's integrity.

As academics writing in peer-reviewed journals are wont to do, the authors suggest that this can be remedied by another layer of bureaucracy. They want a new "firewall" committee to be inserted between the "pure" evidence-based USPHSTF and the "political" fisticuffs of the public square.  It'd be the job of this a new entity to insulate USPHSTF by reconciling the proof and the politics prior to the upload of the final recommendations to the mandarins that are running CMS.

"Another committee?" asks the dismayed DMCB. While that would end the Obamacare fiction that health reform was ever going to be truly "based on science," the real Achilles heel of the JAMA proposal is that it literally doubles the opportunity for political meddling. The smartest political operatives will see this as a target-rich environment and naturally seek to influence all of the committees with any jurisdiction over the medical-industrial complex of laboratory medicine, radiological imaging and medical devices.

The DMCB has bad news for its colleagues who thought that they could have the Washington DC "cake" of enlightened government involvement along with the "icing" of scientific independence. Uncle Sam's been given a clinical inch and now he'll take a political mile to influence clinical guidelines and define standards of care with a one-size-fits-all mentality sprinkled with a healthy dose of cronyism.  Surprise!

The DMCB has an alternative solution: CMS should tread very carefully when it comes to insurance design.  Congress needs to reengineer the preventive health part of the ACA. Instead of building new infrastructure to make up for the emerging failures of the old infrastructure, Washington should be pushing benefit design down, not up, to the local level. It can partner with commercial health insurers to assure that the USPSTF recommendations are considered, but with local committee assessments of market demand, provider opinion and community input to determine what's best for its covered population. It should do this while simultaneously promoting the use of shared decision making to help every patient ponder for themselves when testing is in their best interest.
 
Let a thousand flowers bloom.

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The Oregon Medicaid Experiment: Good Study, Bad Politics

Examining the Oregon Medicaid Study

By now, most Disease Management Care Blog readers have probably read or heard about the release of the health and costs outcomes data from the Oregon Medicaid experiment. The purpose of the study was to ascertain whether one of the arguments still being used to support the Affordable Care Act is really true, i.e. that health insurance leads to better health leads to lower health care costs.

It's not a minor argument. When the important provisions of the ACA go "live" in 2015, liberal-progressive supporters of the ACA will be tenaciously seeking to validate the merits of health care reform, while conservative critics will be looking for any excuse to strangle Obamacare in its crib.

So naturally, if a well performed study supported or contradicted the health insurance hypothesis, it would make little political difference.

How was the study done?

Unable to afford universal enrollment of approximately 30,000 eligible persons into Medicaid, Oregon figured the only fair way to administer the program was to have a lottery. Because participating individuals were allocated to one of two options (with or without Medicaid) by chance, Oregon's approach had all the makings of a prospective randomized clinical trial.

The lottery was conducted in 2008 and the health status and health care costs for the winners and losers were compared using face-to-face interviews an average of 25 months later. While the lottery was state-wide, the study itself was limited to the Portland area. The researchers planned to compare the health status of 10,405 individuals who had won the lottery to 10,340 individuals who had lost and were not enrolled in Medicaid.

Not all persons signed up for Medicaid and others couldn't be tracked down for the one-on-one interviews, leaving a final number of 6487 (62% of the eligible) lottery "winners" versus 5842 (57% of the eligible) "losers."

What were the results?

All in all, the results were disappointing for persons believing the health insurance hypothesis. Having Medicaid didn't lead to better control of high blood pressure, diabetes, blood cholesterol levels or overall cardiac risk. There was also no impact on the likelihood of being admitted to a hospital or having to go to an emergency room.

The good news was that having Medicaid seemed to lessen the likelihood of battling untreated clinical depression and, if pap smears and prostate specific antigen tests are markers for access to primary care services, Medicaid increased that also. Last but not least, Medicaid participants were less likely to have catastrophic medical expenses or be in debt to cover medical bills.

Was the study perfect?

Nope. The study's generalizability was limited by being restricted to persons age 19-65 years in Medicaid and in an urban environment. Two years may not be long enough to truly gauge the benefits of having insurance. Many persons were lost to follow-up. Statistics limited the ability of the researchers to spot smaller improvements in health status.

And how did supporters and detractors of Obamacare react?

As expected. If bloggers are a window into the soul of the body politic, this KHN article amply demonstrates that no one's mind has been changed. Between inflating or minimizing the study's imperfections, cherry picking the outcomes and spinning them, we are no closer to achieving any consensus.

The Disease Management Care Blog's take:

Studies like the Oregon Medicaid study are not only rare, they're as good as we're going to get. Since no study is perfect, the likelihood that Washington DC will be able to use any nuanced research insights to inform the next steps in pursuit of the Triple Aim is not good.

The battle lines have hardened.

The ACA SCOTUS Legal Lexicon

As it navigated the miasma of the Supreme Court hearings on the constitutionality of the Affordable  Care Act (ACA), the Disease Management Care Blog struggled with a host of unfamiliar acronyms, catch phrases, nostrums, euphemisms and tweetisms. Since the DMCB cannot let any novel verbiage go unexamined, it is pleased to offer readers this ACA legal lexicon. The DMCB plans on using each of these terms once a day in the coming days so that its colleagues and enemies alike recognize its health reform chops.

Now you can too:

"Boatload" - a description by one Justice of the amount of cash available to the states, assuming that they go along with the Washington's expansion of Medicaid eligibility. It seems a "bloodbath" is what the states fear if coming shortfalls prompt future administrations to cut budgets while simultaneously insisting that the eligibility rules remain.  Also see "unfunded mandate."

"Cruel and unusual" - the specter of the Supreme Court Justics and clerks having to do what most of Congress never did: read all of the ACA. This was brought up during arguments over "severability" and how to invalidate various provisions. See "crimes against humanity" caused by having to read all the regulations that are currently being promulgated under the ACA.

"SCOTUS" - stands for the Supreme Court of the United States.  Two other US examples include "POTUS" (President of the United States) and "DMCBSOTUS" (Disease Management Care Blog Spouse of the United States).

"Train wreck" - a television reporter's initial assessment of the Administration's efforts to defend the the ACA before SCOTUS.  While one U.S. Senator thought the term was extreme, the DMCB says Mr. Reid should be of good cheer: it could have been worse.

"Bipartisan" - a remarkable rebranding of the ACA by a Presidential spokesperson after the term "train wreck" (see above) was widely quoted in the mainstream media.

"Burial insurance" - a foil used by one Justice to neutralize the debate over whether the government can compel citizens to buy broccoli. Everyone will use health care and everyone will also die, so is it both "necessary and proper" for the Feds to mandate burial insurance?

"Salvage job or a wrecking operation" - the two broad alternatives for SCOTUS as they grappled with the ACA. For another example of "salvage job," see "bipartisan" above; for an example of the latter, see Fox News.

Happy Friday!

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Exorcising the Ghost of Cost Shifting: Why the Alternative May Be Worse

The cost-shifting ghost!

The Disease Management Care Blog continues to welcome blog posts from outside authors. This is another one, courtesy of Erik Tollefson, who works in the health policy field. He can be reached at erikDOTmDOTtollefsonATgmailDOTcom.

Of all the mythologies in the arcane world of health economics, cost shifting holds a hallowed place. First conjured up by commercial insurers in the 1970s to warn against catastrophic Medicaid cuts on hospitals’ financial positions, the rhetorical phantasm of cost shifting continues to rise from the dead to haunt the public sphere, particularly when politicians propose to reform public insurance reimbursement levels or undertake large-scale reforms.

The theory of cost shifting is fairly straight forward: hospitals raise prices on private insurance customers when public payments are cut in order to make up for lost revenue. For all the importance afforded to cost shifting, however, there still remains a (highly) inconvenient truth: Numerous academic studies over the past 20 years have failed to find systematic evidence of its existence.

A recent National Bureau of Economic Research paper by Dranove, Garthwaite, and Ody examines the phenomenon of cost shifting in a new light. While scholars traditionally have examined hospitals’ pricing responses to planned changes in Medicare and Medicaid reimbursement levels, the financial crisis of 2007 provided a unique opportunity to analyze how they responded to a one-time loss in wealth. That crisis had a substantive impact on most hospitals; Not only did consumer demand for services decline, but many hospitals lost a substantial portion of their endowments due to the ensuing market turmoil. Dranove and his co-authors wanted to explore if hospitals that lost a significant proportion of their endowment would “cost shift” in order to make up for lost wealth, compared to hospitals that did not suffer similar losses.

What the authors found was disconcerting. Only a small sample of hospitals raised prices in the aftermath of the crisis. Many more responded with another strategy: cutting costs. Hospitals axed planned and ongoing capital expenditure projects (e.g.,  electronic health records) and shut down low-profit centers, including resource-intensive trauma and psychiatric centers.

Although the paper’s results cannot necessarily be generalized to all health care markets, it does suggest that hospitals can and will respond to financial downturns by cutting vital services.
 
Since the concept of cost shifting offends widely held notions of fairness, the further subsidization of baby boomers’ Medicare benefits in the purported era of austerity might not be politically palatable. The paper by Dranove et al, however, shows that a far worse scenario is possible if Medicare payment rates are slashed: cuts to costly but high value clinical programs. That’s ironic, because many of the benefits ascribed to the Affordable Care Act were predicated on increasing access to crucial medical services, particularly in underserved areas.

The only good news is that if hospitals react to changes in reimbursement levels and wealth loss by cutting important services, policy makers will be unable to summon forth the spirit of cost shifting.  While skeptical economists everywhere may rejoice, that will be small comfort to communities that find that their local hospitals are cutting basic services.

The Concentration of Naiveté

The Population Health Blog's car garage is not the size of a football field. 

So, when the PHB spouse parks our car inside, she tends to err on the side of safety.  She pulls far forward so that the rear bumper doesn't get "dinged" by automatic closure of the garage door.  That obliges the Population Health Blog to inconveniently squeeze past and climb over the front bumper when it wants to use the PHBmobile.

The win-win fix to our travails arrived last Christmas when the perspicacious PHB gave the spouse a positionally adjustable ceiling-mounted laser. It blinks a ruby red light through the windshield onto the dashboard when the car is in optimum position.  Pull too far forward, and the beam will be directed on the floor or a front seat. 

Since it's been installed, the PHB spouse has ignored it.  The laser beam is effectively pointing at the back seat.

The good news is that the PHB's naiveté was limited to parking habits, one house's garage and a spend of $19. 

Not so for Ezekiel Emanuel's work in health reform in the White House and a spend of far more money. 

According to this article in this weekend's Wall Street Journal, the well-meaning Dr. Emmanuel couldn't change the habits of Medicare's vast bureaucracy or of Mr. Obama's formidable political advisors.  As a result, bundled payments remained the stuff of demonstration projects, while the closure of tax exclusions for employer sponsored health insurance was limited to "Cadillac" plans.

What's more, professional liability reform died in the crib thanks to the White House chief of staff Rahm Emanuel's unwillingness to stir the political pot:

He immediately cut me off: "Shut the f— up! We are not doing malpractice. Period. Every time the AMA comes in here, they don't talk about malpractice." Their first, second and third priority, he said, was the formula used by Medicare to determine doctors' pay. "We don't need to do malpractice for the doctors, and I am not alienating the president's base for nothing," he barked. "Stop it."

Rahm's reaction told me everything that I needed to know about the politics of the issue. Democrats would accept malpractice reform under two circumstances: if they needed it to keep the AMA's support for the bill, or if they needed it to attract Republican support. Neither was true. In backroom negotiations, the AMA was solely focused on securing higher physician payments—not on malpractice. And not a single Republican in Congress would even negotiate.

The president had already aggravated liberals by forgoing a "public option." He'd offended unions by limiting the tax exclusion. He wasn't going to antagonize trial lawyers, another core Democratic constituency, for no gain.(from the WSJ, March 7 "Inside the Making of Obamacare.")

In its own small way, the PHB called attention to the AMA's narrow-minded focus on the SGR five years ago.  But the AMA's blunder and PHB's prescience are not the point.  Or, rather, points:

1. The health reform that eventually passed was a curious mix of White House naiveté and Washington inside-the-beltway politics. The result was the Affordable Care Act which continues to spawn quick-fix delays and throw sand in the gears of government.  We deserved better.

2. By concentrating risky decision making in Washington DC, the upside gains in big government may be undercut by the downside of unintended consequences and half-baked decision-making in all 50 states.  It's scary to think that the likes of Dr. Emanuel had such power.

Lessons learned.

The Sunshine Act Will Cost Pharma and Medical Device Manufacturers Hundreds of Millions of Dollars

The regulators go to work....

Fed up by pharmceutical, biotech and medical device manufacturers' vulgar use of "honoraria," "consulting fees" cozy "investment" relationships and other financial sweeteners to buy physician loyalty, Congress included the "Physician Payment Sunshine Act" as part of the Affordable Care Act.

The initial proposed set of regulations appeared in the Federal Register on December 19, 2011.  Comments were invited and CMS' reponse i.e., the"Final Rule," has just been released.  It can be found here.  This sample of the mainsteam news media reporting indicates generally positive reviews.

Case closed? 

Not quite.  That's why you read the Disease Management Care Blog.

As the DMCB understands it, the idea is to notify patients and the public about potential physician conflicts of interest, especially if they are recommending one treatment versus another. The financial relationship data from August through December of this year has to be reported to CMS by March 31, 2015. CMS will, in turn, post the information on the web in September of 2015.

While the DMCB agrees with the intent, it also took the time to scroll through the Final Rule and found some interesting information on page 226. 

CMS estimates the manufacturers will each need to hire a compliance officer and bookkeeping personnel.  Based on prevailing hourly salary rates (page 228) for approximately 1,150 companies, the total cost in year 1 of the Sunshine Program will be $193,037,104.  After some systems automation kicks in and start-up costs are eliminated, the cost will decrease to $144,777,828 "annually thereafter" (p. 229).  There will also be "infrastructure costs" to the tune of just over $12 million in year one and just over $1 million for each subsequent year.

The DMCB thinks that's worthy of some sticker shock, especially when we're all agreeing that the health care system is already too expensive. Ultimately, it remains to be seen if patients will use the internet as advocate-consumers and blunt their physicians' conflicts of interest.  Based on data like these (the impact on consumer behavior) and these (on hospitals) we don't know if patients will vote with their feet or if physicians' bad behavior will lessen. 

It could work, but once again, finding out is going to cost American health care consumers hundreds of millions of dollars.

Stay tuned!

Can Our Politicians (or the Market) Improve on NICE?

The Disease Management Care Blog continues to welcome blog posts from outside authors.  This one is courtesy of Erik Tollefson, who works in the health policy field.  He can be reached at erikDOTmDOTtollefsonATgmailDOTcom.

In the halcyon dog days of summer 2009, U.S. politicians aimed their rhetorical fire on a rather odd target: the UK’s National Health Service (NHS).  With a vote on President Obama’s proposed health reform on the horizon, politicians hoped to tar the reform effort by association: The NHS was painted as inefficient; a decried relic of “socialized medicine” and state planning; some damning charges were levied against NICE (The National Institute for Clinical Excellence) as the putative “death panel” rationing potential life-saving treatments to patients.

In a strange turn of events, recent developments in implementing the ACA, particularly the legislative appropriation of basic benefits, may show the limits of the US political system in making important decisions for patients in an economically efficient matter.
 
Two recent examples may raise red flags.  ACA’s “Basic Benefit” program, originally conceptualized as a way for the federal government to standardize benefit programs offered on health care exchanges, was devolved to the states in order to dispel concerns over excessive bureaucratic intervention in the process. 

The result: massive lobbying by medical interest groups, including chiropractors and acupuncturists, to include their services in the benefit package without examination of medical evidence or economic value of their use. While these rent-seeking activities were seen as part and parcel of the political process, the Nebraska basic benefits proposal to offer a high-deductible plan did not pass muster. 

One economic case for the ACA (albeit a limited one) was predicated on leveraging efficiencies in drug prescriptions for generic drugs, particularly biosimilars.  Recent reports indicate, however, that biotechnology companies are trying to put additional roadblocks in the process to prescribe biosimilars, perhaps preventing the anticipated competition and forecast savings.
 
Although these are only a few examples, they have rapidly emerged as both the federal and (some) state governments have started to implement ACA provisions. 

Regardless of the political histrionics surrounding “socialized medicine”, the ACA is now (for better or worse) the law of the land. The issue of whether “rationing” exists in any health care system is a red herring; in a world of scarce resources, rationing is performed regardless of political ideology.

The real question is: how will rationing ultimately be conducted- out in the open as part of a rigorous deliberative process, or behind closed doors by legislative fiat?  In this sense, the US politicians’ attack on NICE was both prescient and half-correct:   the ACA would indeed give new power to legislators and bureaucrats to make decisions on the clinical and economic efficiency of medical treatments for patients, and NICE is the (sometimes unpopular) face of those rationing decisions.
 
At the end of the day, however, the implementation of the ACA raises seminal new questions about whether the business of politics can be separated from the dispassionate analysis needed to evaluate clinical treatments.  NICE is far from perfect: the institution has received withering criticism for tough decisions and a less than perfect methodology (e.g., the QALY).  One of the main challenges for US politicians, or the healthcare market, is whether they can come up with a better system. 

Seven Things You Need to Know About 2011 Health Care Spending

If you're interested in learning more about the latest U.S. health care cost trends, everything you need to know is in this article in the January 2015 issue of Health Affairs.

Or you could rely on the Disease Management Care Blog to point out the article's 7 most important points.  Use them to impress your colleagues and stymie your foes:

1) The data only go up to 2011; we'll have to wait another year before we'll know about 2015.

2) 2011 health care spending, as a percent of gross domestic product, remained at 17.9%.  The overall economy was slow and that took its toll on the health care sector.

3) That comes out to $2.7 trillion or $8,680 in health care spending per person.

4) While the percent remained stable, the economy experienced modest growth in 2011. The health care sector, thanks to an overall growth rate of 3.9%, kept pace. Prices for services grew less than the demand for services.  As we grow older, demand is likely to grow.

5) Medicare and private insurance grew faster than the economy, which was offset by Medicaid cost cutting by the states.

6) If the past is any guide, when the U. S. economy rebounds, health care spending is likely to accelerate and resume its march toward becoming 20% of GDP.

7) The relative stabilization of 2011 health care costs is independent of the Affordable Care Act.  Many of its important provisions (such as the mandate) don't kick in until 2015.

Medicaid Disease Management: No Impact on Emergency Room Utilization or Inpatient Costs for Enrollees with Diabetes?

Regular readers of the Disease Management Care Blog know that Medicaid is coming. While many of the nation's Governors have declined President Obama's invitation to run Medicaid the Affordable Care Act way, others have agreed to use the ACA's generous funding to enroll millions of their indigent citizens into this vastly expanded public insurance program.

"No problem!" says the disease management vendors.  For years, they've been offering their services to state Medicaid programs and would be happy to expand their contracts.

Unfortunately, an article by Matthew Conti that was just published in the journal Health Services Research suggests that that may not be a good idea.  The article's title is Effect of Medicaid Disease Management Programs on Emergency Admissions and Inpatient Costs.  The only thing that's missing are the words "The Lack of Any" at the front of that sentence.
   
The article studied the impact of diabetes "opt-out" disease management on diabetic patients' emergency room utilization and admissions in three states' Medicaid programs: Washington (started in 2002), Texas (started in 2004), and Georgia (started in 2005).

These states with were compared to states without diabetes disease management.  These control states were selected on the basis of baseline Medicaid enrollment trends that were similar to the three study states. These control states were Hawaii, Kentucky, Massachusetts, Maryland, Maine, North Carolina, Nebraska, South Carolina and Tennessee.

To perform the comparison, Dr. Conti used the Agency for Health Care Research and Quality's (AHRQ) National InPatient Sample (NIS) from the Health Care Cost and Utilization Project ("HCUP"). These databases contain patient-level and longitudinal hospital information on inpatient stays, including cost, payer, admission type (e.g., emergency, urgent and elective), age, gender, primary payer, and total charges. The span of data that was used went from 2000 through 2008.

A complicated pre-post "difference in differences" model was used to compare baseline vs. follow-up:

1) total inpatient charges/Medicaid enrollment (which averaged $430 per diabetic enrollee, with a 95% confidence interval of $265 to $700) and

2) emergency admissions/inpatient admissions (a ratio of 0.37 per admission with a standard deviation of plus or minus 0.12)  All Medicaid enrollees with diabetes were included in the analysis, whether or not they had been enrolled or opted out.  The author used this approach figuring that if a statewide disease management program enrolled up to a third of eligible persons with diabetes (that was the case in Texas), there should have been an observable impact on the entire population. That's the approach favored by the Disease Management Purchasing Consortium.
 
The results?  No state with disease management had lower emergency room utilization or inpatient costs for their Medicaid enrollees with diabetes. The DMCB couldn't find a table with numbers, but the figures (which can't be reproduced without permission) show little impact over time.

What can readers conclude?  Assuming that, during the period of study, the three states' Medicaid programs suffered from the program's endemic issues of underpayment to providers with a relative lack of access to primary care:

1. "Blanket" call-everyone telephonic disease management cannot make up for fee-for-service Medicaid's shortfalls.  It remains to be seen if the ACA's revitalization of Medicaid will make up for this and increase the parallel impact of disease management. 

2) This also means that Medicaid's experience with disease management can't be generalized to other types of insurance with better provider payment rates and patient access to care.

That being said, the DMCB has two concerns:

1. If the DMCB is reading this right, it appears all persons of any age with diabetes were included in the study, including Type 1 diabetics.  If that's correct, that could have also blunted the impact of any disease management program, since children are over-represented in Medicaid and the impact of remote telephonic coaching in Type 1 is widely viewed (even among the disease management vendors) to be ineffective.  Insulin-requiring kids need lots of face-to-face hands-on care.

2. The DMCB is unfamiliar with the three study states' disease management programs, but if they were set up the "old fashioned way" to contact all persons with diabetes without the modern regard to future risk and "impactibility," then it's little wonder that the programs failed.  State-of-the-art population health management tailors its programs by focusing on subsets of persons with chronic conditions that are most likely to benefit.  Any impact on emergency room use or inpatient charges for these patients would be lost in the data "noise" of everyone else's utilization.

Should Medicaid programs that are facing huge jumps in enrollment abandon Medicaid as a result of this study?  Based on this study, the DMCB doesn't think so.  The findings are interesting, but more research is needed.