Category Archives: Health care

Is health care a commodity or an entitlement? Neither.

By Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

The first question that must be answered about health care is about what it is: a commodity, an entitlement, or something else.

If health care is a commodity, then it must be treated as such. The price of health care should be what the market will bear, which, for someone in a life-or-death situation, is a lot. If someone is a poor negotiator, or if circumstances such as a ruptured artery make them unable to negotiate, then they might pay more. If they can’t afford it, then they can’t buy it, and the rest of us should feel no more remorse than if they can’t afford a pickup truck. They should have made better economic choices before they went shopping at the hospital.

Very few of us see health care this way. So if it’s not a commodity, then what is it? The opposite would be an entitlement – a service the government bestows. That’s how it works in a lot of European social democracies and in Canada.

Americans don’t like that either. The idea of the government having the power to give and take away free stuff, particularly something as important as health care, typically makes us uneasy (unless we can figure out some way of justifying it when we personally benefit, of course).

If health care isn’t a commodity, and it’s not an entitlement, then it’s something in between – a partial responsibility for middle- and upper-class individuals under age 65. That’s the messy middle ground Americans have selected, and the way it’s implemented is through insurance.

All of this is relevant because it’s time for Americans to once again sign up for health insurance. It’s now mandatory, of course, and this time, the fine for not paying is $695, which is enough to sting a little.

You can bet that Republicans will use this fact to score political points, even though this part of Obamacare was a conservative idea not long ago.

Insurance’s purpose is to insure us against unforeseeable costs we cannot pay. We pay thousands to the insurance companies today so we’ll be assured of receiving much more expensive care if we need it tomorrow.

For that system to function properly, most of us must lose money on this deal. And it only works fairly if all of us who can afford it pay in. The 23-year-old with money who doesn’t buy insurance will still be allowed to access the system if he crashes his motorcycle, because in that moment his life is so precious that it cannot be commodified. But somebody has to pay for saving that life, and because he didn’t, his health care will be subsidized by the rest of us. That makes it an entitlement.

One of the problems with this middle ground is that it doesn’t contain enough cost controls. If health care were a commodity, care would be rationed by the market. If it were an entitlement, care would be rationed by the government. As insurance exists now, buyers pay most of their health care costs upfront and have few incentives to shop around. Sellers therefore have few incentives to provide the cheapest deal possible.

The United States spends about 18 percent of its gross domestic product on health care, far more than the rest of the world, and the costs still are rising at unsustainable rates. If you’re wondering why you haven’t received a raise in a while, the truth is that you have: Your employer is paying more for your insurance every year rather than increasing your salary.

This can’t continue. In any economy, costs must be controlled by something, and if nothing else will do it, eventually the government will. So the buzzword these days is “consumer-driven health care” – making health care a little more of a commodity, but within the current system. Policymakers who are interested in solving problems are considering how to incentivize consumers to make more informed economic choices. Making them spend more of their own money, but not a crippling amount, through higher deductibles is one imperfect way of doing this.

This will be messy, it will be hard to figure out, and there will be a lot of yelling. So far, the United States has foregone the more cut-and-dried choices – making health care either a commodity or an entitlement – because of those choices’ problems. In other words, we still have a majority consensus about what health care is not. Now we just have to figure out what it is.

The private option ink blot

By Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

You know those tests where therapists ask clients to describe an ink blot because people see what they’re inclined to see? This week, legislators were given a 450-page one.

That would be the report by The Stephen Group, the consulting firm hired by the Health Reform Legislative Task Force to help it decide what to do about the private option in particular and Medicaid in general.

Here’s the ink blot part: Legislators who support the private option can be encouraged by the report because it recommends changing it but not ending it. Meanwhile, opponents can point to a finding that 43,000 people served by Medicaid and the private option may not live in Arkansas, while the programs combined enroll 500 people who are deceased.

Here’s the background. Medicaid is the government health program serving the poor, the disabled, and the aged who live in nursing homes. It’s mostly but not entirely funded by the federal government and mostly administered by states. The Affordable Care Act, which created Obamacare, expanded Medicaid in all the states to cover more lower-income people. In 2012, the Supreme Court ruled that Obamacare is constitutional but that the Medicaid expansion must be only voluntary. Many states said no.

Arkansas created the private option. Instead of expanding Medicaid, it uses those dollars to buy private health insurance for Arkansans not covered by Medicaid and having incomes of no more than 138 percent of the federal poverty level. Republican legislators had the idea and worked with then-Gov. Mike Beebe, a Democrat, to implement it.

In some ways, it’s been a success. It’s currently serving about 200,000 Arkansans, give or take tens of thousands because the state is in the process of redetermining eligibility. According to a Gallup poll, the state’s uninsured rate fell from 22.5 percent in 2013 to 9.1 percent during the first half of 2015. That’s the best in the country, and the private option was a big reason why. Without the private option, hospitals would provide $1 billion in uncompensated care from 2017-21, according to the report. The private option is bringing $1 billion in federal funds to the Arkansas economy every year.

But that’s still a billion dollars in taxpayer money, opponents say, which increases the national debt. While the feds are paying for all of it now, Arkansas will be responsible for 10 percent of the cost in the next few years. It was supposed to serve the working poor, but 40 percent of its beneficiaries had no income last year, so it’s still a health care entitlement program. It’s still Obamacare.

The private option was created in 2013. It must be approved by 75 percent of legislators each year. It barely passed the first time and barely survived in 2014. We can’t keep doing this. So this year, Gov. Asa Hutchinson asked legislators to extend the private option through 2016 while it created the task force to decide what to do next.

Back to the ink blot. The small consulting firm found what the state’s huge Department of Human Services could not: 42,891 Medicaid and private option beneficiaries whose best addresses appear to be located out of state, including 3,220 whose best addresses are in California. Almost 500 on the rolls were dead before they even became a part of the program.

It’s unknown how much of this represents waste and abuse. It’s unclear how many actual dollars are going to the wrong places. A program this big will have challenges with its mailing list. Some people with California addresses may have moved to Arkansas recently.

Still, private option opponents can point to this report and say they were right all along, that government can’t do anything correctly, and the private option should be scrapped.

But the report didn’t recommend that. Instead, it said the private option should be retooled to become more of a transitional program that encourages work and personal responsibility – which, supporters would say, was the plan all along. Participants should look for work and meet health and wellness goals. Legislators might consider limiting participation in the private option to a few years. Meanwhile, the state should create an office that monitors the eligibility of all Arkansans seeking state services, including the private option.

Members of the task force must make their own recommendation by the end of this year. Will they vote to end the private option, or change it? It depends on what they see in the ink blot.

Trump, Carson and the vaccine debate

By Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

One of the most interesting moments in Wednesday’s l-o-o-ng Republican presidential debate came when two candidates sort of stopped debating.

Dr. Ben Carson, retired neurosurgeon, was asked about comments Donald Trump had made espousing a link between vaccines and autism. Carson responded that numerous studies have shown no link between the two. The only study that did show a link has been thoroughly discredited. However, he said children are vaccinated for many diseases and that parents should have some discretion for those not deadly or crippling.

Trump responded with a personal story about an employee whose child had developed autism shortly after being vaccinated. He said he favors vaccinations but would like to see smaller dosages stretched over a longer period of time. Carson again disagreed that vaccinations cause autism but suggested cutting down on the “number and proximity” of shots, not mentioning dosages.

Logic is a tough thing for human beings to achieve, which is one reason democracy is so hard. We have a difficult time separating correlation – things happening at the same time – with causation. We place too high a value on emotional personal anecdotes and not a high enough value on data. That’s why we need research.

On the other hand, researchers are human, too. For years, we’ve been told that silly old Mom was wrong and there’s no link between cold weather and people catching colds, other than the fact that we’re more likely to spread the disease while stuck indoors in the winter. The data was unequivocal, even though Mom’s personal experiences said otherwise. Now research indicates that cold temperatures in the nasal cavity might slow the body’s immune response to rhinoviruses after all.

The scientific process has resulted in an explosion of knowledge and a vast improvement in our living standards. But it is an imperfect way of arriving at truth. Instead of a straight line, it zigzags. It gets some things right and some wrong and then corrects itself.

It especially runs into trouble when generalizing about humans, which are extremely complex and similar but not identical. It’s very likely true that vaccines do not cause autism across the broad spectrum of humanity. But it is not necessarily true that vaccines do not ever cause autism – or some other adverse reaction – in a particular person. These many parents who say their child changed immediately after being vaccinated – are they all foolishly failing to see that it was just a coincidence? Every last one of them?

If you are a health professional, you might have responded to the Carson-Trump exchange (and that last paragraph) with horror. While studies show there’s no link between vaccines and autism, there’s clearly a link between a lack of vaccines and increased cases of childhood diseases.

But many parents are opting out of vaccines now, so maybe it’s time for the medical establishment to rethink its approach. An atmosphere of distrust is being created, which happens when people’s concerns about their children are summarily dismissed. Maybe it’s time to stop arguing with parents and start working with them. Certainly, medical professionals and not presidential candidates should determine dosages. But would alternative vaccination schedules really be completely unacceptable?

Carson and Trump are both Republicans, but they’re about as different as two candidates in the same party are going to be in this day and age. They addressed this issue from very different perspectives. Within three minutes, it was apparent that their positions actually were at least in the same ballpark.

The truth is that Americans are divided on a lot of issues, but on many of them, it’s a difference of degree or approach. Almost all Democrats enjoy making more money and do not enjoy paying more taxes. Very few Republicans favor completely dismantling the social safety net. Nobody wants Iran to develop a nuclear bomb.

None of us will get everything we want – even if we are completely right. The trick in a complex society is to find an acceptable common ground. Does one exist in the great vaccine debate? Isn’t it worth trying to find out?

In the most adversarial of circumstances, Trump and Carson, the two frontrunners standing next to each other, ended up not so far apart on an issue where they seemed at first to be totally at odds. If that can happen in a presidential debate regarding vaccines, maybe it can happen on other issues after the election, too.

Health care reforms: These would be easy

By Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

Health care reform is difficult, in large part because it’s so hard to achieve consensus on many issues related to it. Repeal Obamacare, or amend it? Keep the private option, or replace it?

So maybe more attention should be paid to reforms where agreement is possible. For starters, here are two.

One would be for hospitals to make fewer people sick. According to the federal Centers for Disease Control and Prevention, 648,000 Americans contracted infections while in an acute care hospital in 2011, and 75,000 of them died while a patient, though not necessarily from the infection. One in 25 hospital patients is infected during their stay.

Not all of those infections were the hospitals’ fault, of course. Many patients have weakened immune systems. But many infections are preventable if hospitals follow simple procedures. Sometimes it’s as simple as making sure physicians and nurses wash their hands.

That’s one of the practices at Unity Health in Searcy, one of nine hospitals in the country and the only one in Arkansas given a top rating for infection control by Consumer Reports.

The magazine recently rated 3,000 hospitals based on five infections: clostridium difficile, or C. diff, which develops in 290,000 patients each year and contributes to the death of at least 27,000; methicillin-resistant staphylococcus aureus, or MRSA, which contributes to more than 8,000 deaths annually; catheter-associated urinary tract infections; central-line associated bloodstream infections; and surgical-site infections.

Unity Health staff members told me there’s no magic bullet. Instead, they just follow nationally recognized guidelines, such as using a bleach-based cleaning procedure to combat C. diff infections. They avoid unnecessary catheterization. The housecleaning staff keeps the rooms clean.

How can more hospitals be encouraged to follow Unity Health’s lead? One way is to continue changing the perverse incentives surrounding health care. Medical providers traditionally have been paid by insurance companies and government payers under a “fee for service” model. They bill for each service they provide, so if a patient is infected while in the hospital, the hospital gets paid for treating that infection. That doesn’t mean hospitals are purposely careless, but it does give them less reason to be extremely careful.

Arkansas is a national leader in creating an “episodes of care” payment model based on appropriate costs for select procedures, such as knee and hip replacements, from the beginning to the end of treatment. If average costs for all such patients fall below a certain threshold, medical providers are paid a bonus, and they face a penalty if costs are too high. So if enough patients contract an infection, the hospital’s bottom line will suffer.

The model was created with input from government agencies, insurance companies and medical providers. In other words, consensus was created. The state started with five episodes and has been increasing the number. The federal Medicare program is experimenting with the model as well.

Makes sense, doesn’t it? If health care is to remain a free market entity, then providers should face the same expectations as other businesses: If I hire you to fix something, you don’t get paid more if you break something else.

Another health care reform where consensus should be possible is increasing the number of medical professionals.

Recently, 214 physicians completed their residency training at UAMS and are ready to practice medicine. Unfortunately, that’s only a drop in a bucket with a hole in it. According to a 2015 study sponsored by the Association of American Medical Colleges (AAMC), the United States faces a shortage of between 46,000 and 90,000 physicians by 2025.

A medical education is costly. According to the AAMC, 84 percent of 2014 medical school graduates had education debt, with a median debt of $180,000 – and that comes after many years of school, long after law school graduates are making money suing doctors.

Gov. Asa Hutchinson has made increasing the number of high school students with computer coding skills a top priority. How about an effort to produce future doctors? Could we agree on that? If Arkansas can award more than 168,000 lottery scholarships, many to students who aren’t particularly focused or directed, can it reallocate resources to qualified medical school students?

More doctors are needed, and hospitals shouldn’t make people sick. Solving those problems won’t be easy, but coming to a consensus will be easier than it’s been with Obamacare and the private option. So can we talk about the easy stuff more often, and fight about the hard stuff a little less?

Private option: It’s all about the paperwork now

By Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

As of the beginning of this month, 31,501 Arkansans no longer have insurance through the private option, mostly because there’s a problem with their paperwork.

The state is redetermining eligibility for 600,000 Arkansans who receive health insurance through the private option or traditional Medicaid. Medicaid serves the poor, the disabled and others. The private option uses federal dollars to buy private insurance for lower-income Arkansans who previously wouldn’t have qualified for Medicaid.

The redetermination process, required by the federal government, has been a mess, beset by costly computer glitches. Now the state is trying to make up for lost time. Recipients whose incomes appear to have changed 10 percent are sent a Department of Human Services letter warning that they must verify their income within 10 days or they’ll lose their benefits.

If you count both the Medicaid and private option recipients, and both July and the upcoming August terminations, about 48,000 Arkansans will be off the rolls – 97 percent of them because they didn’t meet the deadline.

Some of that is because the state is overwhelmed. Some recipients have claimed to have submitted their incomes and then been told they’ve lost their benefits anyway. On Tuesday, Hutchinson announced a two-week pause in sending out the warning letters while DHS scrambles to find staff to process all the paperwork.

Why aren’t the others responding? Maybe they never realized they were on the private option, or they moved and never received the letter, or they read the letter and tossed it because they’re not sick right now. Some mistakenly sent verification to their local DHS office instead of the address required by the letter.

And some may have misunderstood the letter’s meaning or importance. Using bureaucratic language, it tells the recipient to verify their income or “your case will be closed and you will have to reapply” – not “or you will lose your insurance.” The envelope isn’t marked with anything that would communicate that it’s more important than all the other mass-produced envelopes in the recipient’s mailbox. Here’s the verification letter.

Asked if he might throw away an impersonal mass mailing, Gov. Asa Hutchinson, who personally selected that 10-day timeline, said, “If I were a recipient of Medicaid from DHS, and I get a letter from DHS, I would presume it’d be a responsibility to open that letter.”

He’s right that recipients of a very generous government health benefit have at least that responsibility. But the private option serves many lower-income people who, for whatever reason, haven’t previously qualified for Medicaid and often haven’t had health insurance, government or private. Many have jobs but just don’t have experience working the system.

Hutchinson also pointed out that recipients actually have much more than 10 days. Counting a grace period and then a 90-day appeal process where medical bills will be paid retroactively, recipients actually have three or four months before they are completely off the rolls. Before losing their benefits, they are told through another bureaucratic-sounding termination letter that their ”case will be closed.” Also, the insurance companies who provide private option recipients their coverage were alerted that they were about to lose their government-funded ratepayers, so they had a big incentive to try to contact them as well.

Seems like there should be a better way to verify who should receive a government benefit, and who shouldn’t. The state will pay to kick people off the private option, and then pay to put them right back on it when their pharmacist can’t fill their prescription.

The backstory behind this process is the controversy over the private option itself. Created as an outgrowth of the Affordable Care Act (Obamacare) it barely passed in 2013 and barely was reauthorized in 2014. The Legislature cut the private option’s marketing budget in 2014, which might could have paid for the ink to print on those envelopes, “Urgent: Respond within 10 days or you’ll lose your insurance.” The private option survived 2015 only because Hutchinson convinced legislators to give him a couple of years while he and a legislative task force create something better by the end of 2016. One by one, private option supporters are losing elections or drawing primary opponents.

So part of what’s happening is that we’re all trying to prove that we can get tough on the private option, right before we close the case on it and reapply with something else.