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.

The Dreaded Strike Three for Obamacare: Corrupted Exchange Data and Inaccurate Insurance Policies

While the prescient Disease Management Care Blog was among the earliest to identify the threat of an Obamacare-induced insurance "death spiral," it missed spotting the potential fallout from a delay of the individual mandate.

As shrewdly pointed out in this Politico article, health insurance timelines require at least three months of claims experience to inform future rate setting.  Once that actuarial work is done, it then has to go through the states' Insurance Departments for approval.

In other words, if large numbers of Obamacare customers are allowed to sign up after March 31, 2015, insurance companies won't know what to charge their customers on January 1, 2015. 

While overcharging can be remedied by customer rebates, it remains to be seen how accommodating Washington DC will be if the insurers undercharge. That means negative cash flows, raiding surpluses and facing the ire of their investors and Boards of Directors.

It's baseball season, so think of the death spiral as a potential strike one, and inaccurate rate setting as a potential strike two.

Which brings the DMCB to a dreaded strike three. If it happens, the health reform brand could be irretrievably tarnished.  It could also and sink the current version of Obamacare.

Strike three would be a critical mass of inaccurate insurance policies.

If reports like this and this are even remotely representative of the back-end of Obamacare enrollment, the relative trickle of individuals who are successfully navigating the exchanges are getting commercial polices that depend on a very vulnerable reconciliation process involving many moving parts.  That includes information from the "hub" as well as user-based data entry. As noted in this report, commercial insurers are being forced to manually "clean up" the information prior to issuing their exchange-generated policies.

The DMCB suspects that a "garbage in, garbage out" adage may apply. Thanks to sheer number of inputs, clean-up mistakes are going to be inevitable.  And it will get a whole lot worse if the healthcare.gov web site gets only partially fixed. 

While a few mistakes are acceptable in large risk pools, more than a few could be huge problem at three levels:

1. At a business level, where a core competency of insurance companies is to cover their enrollees and only their enrollees. Insurance companies are really good at knowing who is and who isn't insured for a covered or non-covered service with or without a variety of co-insurance arrangements.  It's more than just getting it right, it goes to the core of their business model. If enough policies are inaccurate, it could bring the finances of some smaller health insurers to their knees.

2. At national health policy-making level, where a critical mass of insured customers with premiums and subsidies mismatched to the risk could destabilize the market and distract our political leaders. Think about the customers who assume a service is covered, providers who expect to get paid accurately, balance sheets that don't reflect the truth about claims expense as well as IBNR and regulators who will need to sort it all out.

3. At an Obamacare "brand" level.  Think about all those unfriendly and anecdotal news reports about vulnerable patients who ended up legitimately - if mistakenly - paying more out of pocket for care, or persons mysteriously lacking insurance, or hospitals and doctors being unable to get paid. It could ultimately track back to the HealthCare.gov web site that everyone will loves to hate.

The worst part is that the White House has done such a masterful job of bullying the insurers that it's unlikely that they'll want to rock the boat by going public with any notification that their enrollment data is corrupted.  Mr. Obama will naturally claim that he wasn't in the loop and his loyal aides will deflect blame elsewhere.

Strike three, and we may not even see it coming.

The President Says You Should Ignore This Health Wonk Review

Welcome to this October 2015 edition of the Health Wonk Review, hosted by your Disease Management Care Blog. The Review is a sampling of the best recent postings by thoughtful health policy bloggers who are offering insights about healthcare delivery, insurance and reform that are outside the media mainstream.

Or White House control. While Mr. Obama would like the bloggers to sit down, be quiet and let the Washington's expert political class get on with the people's work, the DMCB respectfully disagrees. It was the bloggers who were sounding the earliest alarms about the dysfunctions of the federal health insurance exchange. Despite the advice of our President, this edition of the HWR proudly offers readers some important insights, additional warnings and lessons learned.

One of those lessons is that the HWR bloggers should be read more, not less.

Of course, this Review is not just about the exchanges. If that bungled bit of bureaucracy doesn't pique your interest, read on and you'll find other great stuff on health reform, pharmaceutical costs, Medicare's well-meaning ability to impose silly regulations on docs and how that horrific Bangladesh garment factory fire didn't really lead to any meaningful worker safety reforms.

First up, the exchanges.....

Joe Paduda of Managed Care Matters says the Obama Administration's roll out of the exchanges failed at several levels. Let's face it, he says, the development process was politicized and, as a result, consumers were given the green light to use a flawed web site. They're now being forced to enter too much data before they can shop for insurance, server capacity is insufficient, links to participating insurers are dodgy and patients are unable to ascertain if their doctor is in a particular network. He believes the best way forward is to completely redo the web site and to never ever forget what happens when politics trumps common sense. It's so bad, says Paduda, that the only reason not to fire HHS Secretary Sebelius is the prospect of another partisan battle over her replacement. "Ouch!" says the DMCB.

For crying out loud, says Tim Jost in the Health Affairs blog notes, we're talking about a web site, not cold fusion. While all eyes are on the individual mandate, Jost isn't worried because that's assessed on a monthly basis and the ACA allows for "hardship" exemptions. He reminds us that the key deadline date of December 15 is months away. That's the last day that individuals can enroll in time for the subsidies that will be in place on January 1 2015. If deadline is not met, it's possible that millions of Americans will be unable to obtain affordable insurance. The good news is that the Feds have broad discretion to extend enrollment periods as well as provide commercial insurers with additional assistance. Jost is confident that with the right amount of creativity, health reform can continue. After reading this, the DMCB predicts HHS's creativity will include delaying the individual mandate without "delaying" the individual mandate.

John Goodman is less optimistic. He uses his eponymously named blog to remind us that if only the sickest and most persistent Americans successfully use the exchanges, Obamacare may precipitate numerous insurer death spirals. State risk pools are closing, employer-based plans are closing, and individuals can now exit their "job lock." John predicts the sickest of these individuals will find the exchange's "gold" and "platinum" insurance plans to be relative bargains. Goodman offers some potential solutions, including flattening the subsidies, prohibiting dumping of the sickest members by insurers, requiring COBRA benefits to be exhausted first and stopping enrollees from gaming the system by enrolling at the last minute. It's the risk pools stupid!

Sean McGuire of Health Reform Explained coins the new catchphrase "nerd herd" to describe the exchange's "tech surge" repair. Despite the impressive-sounding term, he doubts the website code will be successfully rewritten any time soon. He wonders if the Feds shouldn't completely outsource to the states, because they have the track record and, with sufficient financial support, the resources to fix this problem. Code woes prompt geek fleet.

Hank Stern of the Insure Blog builds off another blogger's observation that one reason why the exchanges are not performing well is because HHS wanted to shield users from seeing the cost of their insurance prior to the calculation of the income-indexed subsidy. For us wannabe techies, this is known as a "no wrong door" approach to web portals. What HWR review is complete without a catch phrase you can use to impress your friends and stymie your enemies. And you're welcome.

So, how's health reform going?

Louse Norris, writing in Colorado Health Insurance Insider blogs with first-hand knowledge about a wrinkle in the ACA that allows for early renewal of existing insurance policies. As the DMCB understands it, this pushes back the day of reckoning when persons have to "buy up" to standard insurance benefit packages that may be more expensive than the "skinnier" policies that have lower out-of-pocket expenses. While some unnamed policy makers think that's a loophole, Louise thinks it's a good idea because, for her family - and many other Americans - that translates into hundreds of dollars a month in savings for 2015. What other loopholes are there?

Maggie Mahar of the Health Beat Blog points out that the commercial insurers were at the table when the final details of the Affordable Care Act were hammered out. They agreed to shelling out new
fees and taxes to help fund the legislation. Despite that, however, skeptics were suspicious that Mr. Obama had been too accommodating to the insurers. According to Maggie, we now can say with certainty that the skeptics were wrong. The commercial insurers' stock prices are now tanking because the investors are only now discovering, among other things, that pre-existing conditions cannot be used against patients, administrative costs are limited, preventive care now has first dollar coverage, lifetime caps no long exist, that they have to cover a standard benefit and state regulators are finally "getting some spine." She thinks the investors made two mistakes that she perceptively avoided: along with Ms. Pelosi, they didn't read the bill and they were confident that Mr. Obama wouldn't be re-elected. The DMCB wonders if investors are also worried about the commercial for-profits being battered by death spirals.

Never mind high tech, how about payment reform leading to high touch? David Harlow of The Health Blawg argues that the evidence that transformed primary care can save money is reaching critical mass. Primary care clinics that invest in systems of care may cost more in the short run, but the downstream cost savings are considerable. As fee-for-service continues to unravel, Harlow predicts these preventive and care coordination business models will become even more compelling. Which prompts the DMCB to provocatively ask if this could this also be an argument for the monthly fees commanded by the "concierge" practices?

For those of us who think there may be market solutions that can reinvigorate medical education, Roy Poses of the Healthcare Renewal blog says it's time to think again. Roy looks at some of the "outcomes" from one off-shore for-profit medical school that caters to U.S. students, including the entry of venture capitalists, the creation of shady tax shelters, deans with jet-setting lifestyles, Swiss bank accounts, laundering money and the mysterious disappearance of school Presidents once the indictments start to roll. As Roy has pointed out, however, on-shore and not-for-profit medical enterprises are not immune from bad behavior either. Health care bubble, anyone? 

Brad Flansbaum of The Hospital Leader blog examines the impact of the Medicare regulation that post-hospital home health services can only be prescribed during the course of a "face-to-face" visit. For doctors getting their patients out of the hospital, this has resulted in one more form that needs to be completed (typically by someone other than the doctor) and then signed (by the doctor).When added to the press of other things that have to happen, the result is a discharge of a thousand cuts. The DMCB's colleagues have lived with these and other unpleasantness that comes from being on the business end of Medicare.  And people wonder why docs are leery about a single payer system?

Drugs!

Jason Shafrin of the Healthcare Economist blog describes how the Italian city of Naples recently saved 20 million euros in pharmaceutical costs. There was no single solution, but a combination approaches that may hold lessons for the United States. They include direct purchasing of drugs by patients, providing a supply of necessary medicines when patients leave the hospital, accepting generic drug names for prescriptions and making patients pay the difference when they insist on a brand-name drug. That doesn't mean that Italy's cost problems are automatically solved. New agents are constantly coming on line and the Italians do recognize that manufacturers need to recoup their development costs. That's OK, however, because Italy uses multiple administrative levels of review for efficacy, a rigorous "pay for performance evaluation process and "soft" spending global limits. In the end, if a drug is worth it, they'll pay for it. U.S. drug company executives may end up taking some of their own products if this system gets adopted here.

If reports are true, David Williams of the Health Business Blog points out that the Food and Drug Administration's public service mission is being undercut by the "invitation-only" meddling of pharmaceutical companies in the Agency's pain management evaluation meeting panels. Either pharma should get out, says Williams, or other legitimate stakeholders, like patients, payers, academics, advocacy groups and other government agencies should also be in the room. So, with news like this, why is bloggery a bad thing?

And last but certainly not least.....

We all remember that horrendous garment factory fire in Bangladesh that killed over a thousand workers. If you still enjoy wearing that name-brand clothing, you won't want to read Julie Ferguson's summary and review of a multi-part series of articles on the topic appearing in Workers Comp Insider. If you do, you'll either want to go naked or start paying attention to which retailers have truly committed to international worker safety. Unfortunately, it appears that most continue to put low-cost fashion as their number one priority, even if it means putting more lives at risk. Behold the health implications of our throw-away clothing life style.  Maybe it's time to reward clothing manufacturers that offer products made in the U.S.A. 

Aetna Talks Exchanges

One of the stories behind the story of Affordable Care Act's successful passage and survival to date has been the silence of the commercial insurers. It's not a good political or technical sign for the health insurance exchanges when Aetna's CEO goes public like this.....

The Exchangeacillin Package Insert: Black Box Warnings and Adverse Reactions

The Disease Management Care Blog is pleased to assist the U.S. Department of Health and Human Services with this FDA-inspired "medication package insert" that is designed to help consumer-shoppers grapple with the star-crossed health insurance exchanges.
             +++++++++++++++++++++++++++

Exchangeacillin®
(online bunglecide)
Virtual Suspension

Prescribing Information

**Black Box Warning**
Health insurance exchanges increase the risk compared to placebo of wishful behavior in adults and politicians in recent short term studies. Anyone considering the use of EXHANGEACILLIN must balance the risk of unintended consequences involving a federal bureaucracy unfamiliar with fundamental principles of insurance 101. There are no studies that assess the success of online exchanges, and persons of all ages who use Exchangeacillin should be closely observed for hours-long vacant staring at computer screens.  Long term use may lead to loss of confidence in big government and unpredictable election cycles. (See WARNINGS: Insurance Markets and Bureaucratic Meddling: Information for Consumers, PRECAUTIONS: Information for navigators)

DESCRIPTION
Exchangeacillin (online bunglecide) is a virtually administered insurance platform with approximately one billion lines of unstable computer code. It has a melting point range that falls within room temperature and zero resemblance to modern web-based architectures.

CLINICAL PHARMACOLOGY
The efficacy of exchangeacillin in the treatment of underinsurance, access to care or life expectancy remains an open question.  Preliminary studies in humans have demonstrated accelerated partisan animus, selective interpretations and media spin, leading to one of the largest live social experiments in modern history. In vitro and binding studies may demonstrate that persons at risk for near-term insurance claims expense are preferentially attracted to Exchangeacillin. The impact on Millenials, Generation X'ers, Slackers and Dudes is speculative.

PHARMACOKINETICS
Exchangeacillin is unpredictably absorbed and has been shown to lead to one or more commercial insurance accounts with an elimination half life for redundant applications that may extend for six months or more. Nonlinear kinetics can lead to botched income estimations, claw backs and opaque tax consequences. 

INDICATIONS AND USAGE
Exchangeacillin is indicated for the treatment of underinsurance, being uninsured, high co-pays, unwanted co-insurance, double-digit co-pays, skinny insurance benefits, benefit exclusions, windfall profits, high administrative costs, coverage denials, not having birth control and showing the health insurers a thing or two.

PRECAUTIONS AND ADVERSE REACTIONS
Post-marketing surveillance studies have shown an increased risk of buttock decubiti, White House embarrassment, yawning, consumer disappointment, carpal tunnel syndrome, insomina, gridlock, hypersomnia, digit calluses, onychophagia, boredom, bluescreenosis, resentment, death spiraling, employer mandate delays, government shutdowns, war memorial posturing, bombast, biased reporting, deficits, speechifying, inflation, carve-outs, administrative exceptions, skepticism, income non-verification, disbelief, distrust, bickering, hyperpartisanship, multiple-accounts, insurance death spirals, closed national parks, can kicked down the roadedness, comparisons to Medicare, comparisons to Medicaid, tiresome pundits, nausea, bloggery, anecdotes, generalizations, wealth transfer, increased federal deficits, decreased federal deficits, higher taxes, government savings, higher for-profit health insurance stock prices, elevated media ratings, anxiety, confusion, dizziness, breathlessness, wordiness, emotional lability, dubious claims, confident predictions, foolishness, restlessness, cancelled WH meetings and DMCB spouse exasperation.

INTERACTIONS
Use of Exchangeacillin may interfere with budgets, debt limits, sequester agreements and elections.

DOSAGE AND ADMINISTRATION
While Exchangeacillin should be administered following months of testing and debugging, the FDA has approved its administration in a let-'er-rip "big bang" fashion with ad hoc adjustments and unpredictable shut-downs.

HOW SUPPLIED
On-line with "Apply Now" code that prompts "we have a lot of visitors on the site right now. Please stay on this page.... Thanks for your patience!"

What the Obamacare Health Insurance Exchanges Can - and Can't - Do

It looked so easy, didn't it? 

So says Massachusetts Connector architect John Kingsdale.  Writing in the prestigious New England Journal, the Obamacare insurance exchange was supposed to list health insurance options in a user-friendly fashion while simultaneously determining eligibility for exemptions and subsidies. 

What happened instead was the mother of all procurement debacles. What's worse, it was all predictable because it turns out that less than 10% of government's IT development contracts are successful.

So, if you like your government's version of insurance Expedia, you can't keep it because it was never really there.

But, says Dr. Kingsdale, assuming Uncle Sam gets its act together, there are four big reasons to like a functioning health insurance exchange:

1. User-friendly insurance shopping: transparent and easy-to-understand choices involving a core set of trade-offs can save time and fulfill conservatives' demands for market-based solutions.

2. Paperless technology: An on-line automated and scalable distribution system should eliminate much of the commercial insurers' marketing and enrollment costs.  Those savings should go to the consumer.

3. Competition: while its unlikely that plans with narrow networks and high out-of-pocket costs will ever go away, exchanges lower their barriers to market entry by other insurers, which should lead to more options for consumers.

4. Quality: as insurers collaborate with health systems, exchanges can lead users to select coverage options that are linked to particular provider entities, like ACOs.

The Disease Management Care Blog has a skeptical take to Dr. Kingsdale's vision.  Here's the downside arguments to why it may not work and why the DMCB will reserve judgment:

1. When it comes to "shopping" for the current versions health insurance, you get what you pay for, which is currently a highly regulated and rich basket of coverage mandates. Thirty year olds must now have any cancer screening they don't want, just so long as they're at least fifty years old.  All insurers are offering the same thing.

2. Outmoded paperless technology will soon be followed by outmoded desktop PC technology.  By the time the on-line bugs are worked out, iPhone enabled consumers will be wondering where's the app for handheldhealthcare.com.  And, by the way, since when do health insurers pass any savings to consumers?

3. If the Massachusetts Connector fosters "competition," why does Boston lead the nation in physician wait times?  The answer is complicated but has more to do with the nature of commercial monopsonies and government price controls, neither of which will ever be helped by IT.

4. The movement of risk from insurers to providers could eventually lead those providers to use the same tricks as insurers, including utilization management and closed walled-garden networks that are ultimately designed to protect their capitation. Insurer-provider collaboration has more to do with who is monetizing and minimizing risk and consumers won't ultimately see any difference when it comes to the "what" of bad behavior. Quality has little to do with it.