Category Archives: Health care

Reforming health care reform

Health care, Legislature, State government

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

During the next two years, the most important number in Arkansas health care may be 1332.

That’s a section of the Affordable Care Act, the one that created Obamacare, that, starting in 2017, may allow Arkansas significant flexibility in implementing the law – potentially even letting it nullify some of its more controversial elements, including the mandate that individuals buy health insurance. Or maybe not.

Legislators serving on two panels these past two weeks heard testimony regarding Section 1332. Cheryl Smith Gardner is directing the state’s changeover from a federal exchange to a state exchange, which is where small businesses and individuals buy insurance. She once was a researcher for the conservative Heritage Foundation. Dr. Lanhee Chan is a Stanford University research fellow who was the chief health advisor for Mitt Romney’s 2012 presidential campaign.

In other words, these are not left-wingers, and both of them indicated Section 1332 offers the potential for major state-based reforms to the Affordable Care Act.

In a nutshell, here’s how it would work. Beginning Jan. 1, 2017, states can receive waivers from the federal government for large sections of the law provided their reforms meet four requirements. A waiver says the law does not apply in a particular situation.

First, health plans – whether provided by insurance companies or the state – must provide coverage that is at least as comprehensive as would be provided otherwise. What does that mean? It’s not clear, but it could mean that plans in Arkansas could have a heavier focus in some areas and a lighter one in others than they currently have.

The other requirements are that out-of-pocket expenses for individuals must be no higher than they are now; coverage must be provided to a comparable number of people as otherwise would be provided; and the changes must not increase the federal budget deficit over a 10-year period.

The section is so open-ended that it appears states can propose almost anything – although one thing they can’t change is the requirement that insurance companies offer coverage regardless of pre-existing conditions. If a state can figure out a way to cover as many people without the individual and employer mandates, it can propose it. Arkansas might be able to move large parts of its population from Medicaid, which is strictly government health care, to the so-called private option, which is more flexible because it’s government-funded health care through private insurance companies. Chan said it might be possible to collectively make changes to all federal health care programs within a state’s boundaries, including Medicare, where states’ roles now are limited.

“My own view is that 1332 has the potential to be a significant step forward for those seeking market-based health care reform,” he told the Health Reform Legislative Task Force May 28. “The challenge, of course, as with any waiver is that the negotiation process has two parties. It has the state, and it has the presidential administration.”

There’s the catch: The waivers have to be approved by the secretary of Health and Human Services and the secretary of the Treasury, which includes the IRS. The skeptical lady sitting beside me was doubtful those officials will approve anything that’s not more generous to beneficiaries than Obamacare already is. Sen. Terry Rice, R-Waldron, wondered if the administration might fail to hold up its end of the bargain if a waiver were approved. When Chan said that would be “unprecedented,” Rice replied, “I appreciate that thought, but I’m one that (feels) like we’ve seen some unprecedented things.”

On the plus side, the Obama administration has proven itself willing to grant health care-related waivers. The private option, in fact, exists because of a waiver. The administration knows that the Affordable Care Act is widely distrusted in red states like Arkansas, so it has an incentive to be flexible. Judging by the questions legislators asked, most seem to be keeping an open mind. Chan’s job in 2012 was to help defeat Obama, and he seems cautiously optimistic about the possibilities.

No state has yet submitted a waiver request, and Arkansas is nowhere near doing so. In fact, most legislators only now are learning much about it. It could create a lot of work that leads nowhere and is a huge disappointment. Or it could let states creatively reform health care reform. We won’t know which will be the case until 2017 is much closer. Until then, remember the number 1332.

Changing health care’s business model

Business and economics, Health care

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

On Tuesday, the CEO of a major Arkansas employer announced a new offering that could cost it a lot of business someday.

Troy Wells, president and CEO of Baptist Health, announced his hospital system had received a grant from Verizon Wireless for a yearlong diabetes study. The study will provide 125 Pulaski County patients with tech tools such as wireless glucometers that will transmit glucose levels to medical staff when patients test themselves at home. The patients also will be given cell phones so health professionals can coach them up on taking care of their health. Another group will be given more old-fashioned equipment, and the results will be compared.

The technology will help medical staff keep an eye on their patients to spot problems early and help them stay healthy. All of the patients will be “medically underserved,” meaning they face barriers to health care. In other words, they’re probably poor, they’re often aged, and they need help managing their diabetes.

This kind of preventive telemedicine holds great promise for society. Aside from the human factor, it costs the health care system much less to keep a patient’s blood sugar levels stable than it does to intervene after the disease has begun to take its toll.

The problem is, what’s good for patients, and for their families, and for the health care system, and for society, is not necessarily good for Baptist Health’s bottom line.

Of all the problems with health care reform, the biggest is that not nearly enough has been done to address the system’s perverse financial incentives. Baptist Health, like most medical providers, makes its money by treating patients, not by curing them and not by helping them stay healthy in the first place. About the only time health care providers have a meaningful financial incentive to promote good health is when they’ll otherwise have to provide uncompensated or inadequately compensated care – which is probably the case with some of the patients in this study.

The health care payment system operates under a “fee for service” model. Medical providers bill insurance companies or the government for each procedure, regardless of the results and regardless of how efficiently they perform. Therefore, promoting a healthy population cost-efficiently is about the worst thing a medical provider can do for itself, financially speaking.

That’s not to say that doctors and hospitals don’t try to cure us. Frankly, they deserve credit for acting against their self-interest. But, like all humans, they respond to incentives. As a writer, when I’m paid by the word, I’m not going to cut the story short – and no, I’m not paid by the word for this column. Likewise, incentives shape how medical providers decide priorities, in how they invest resources, and in what interventions they recommend. The reason there’s no cure for the common cold is because it hasn’t been financially viable to invent one. For cold medicine, it has been, which is why pharmacies and grocery store aisles are stocked full of multiple varieties.

Reforms are occurring. For example, the state has been engaged in a years long effort, the Arkansas Payment Improvement Initiative, which is replacing the fee for service model with one based on “episodes of care” in some situations. Medical providers, state agencies and insurance companies together have determined appropriate costs for various health events. If medical providers’ costs over time are lower than that range, they receive a financial reward. If costs are higher, they’re penalized. The federal Medicare system is doing something similar.

After the Arkansas initiative began and the incentives changed, unnecessary antibiotic prescriptions for unspecified respiratory infections dropped 19 percent. As former Arkansas Surgeon General Dr. Joe Thompson, a pediatrician, told me, it had been easier for him to prescribe the medication than it had been to spend 10 minutes telling a mother why it wouldn’t help her child. Now that those unnecessary prescriptions could cut into doctors’ bottom lines, they might take the time to explain.

To create a healthier society and save on health care costs, the system must provide a higher profit for the good folks at Baptist Health when they prevent disease, or quickly cure it, or cheaply manage it, than it does when they treat it or operate on it. Doctors and hospitals often nobly act against their own financial self-interest, and thank goodness they do. But it’s hard to build a lasting business model that way.

Tough task for health care task force

Health care, Legislature, State government
Jim Hendren is one of the chairmen of the health care task force.
Jim Hendren is one of the chairmen of the health care task force.

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

Sixteen legislators will spend the next 22 months trying to figure out how to do what no one has been able to figure out so far – cost-effectively provide health care to lower-income people without growing government and making more people dependent upon it.

Also, they must try to produce a proposal that would be supported by 75 percent of the Legislature and the governor. Meanwhile, the Supreme Court this year will issue a ruling on Obamacare that could throw the entire health care system into disarray.

The group is called the Arkansas Health Care Reform Legislative Task Force. Tough task, huh?

The task force was created earlier this legislative session as Gov. Asa Hutchinson’s way of resolving the impasse over the private option. He doesn’t want it simply to go away without a replacement.

The private option was Arkansas’ response to the Affordable Care Act’s requirement that states expand their Medicaid populations, and the Supreme Court’s subsequent ruling that it had to be only optional. Many Republican-leaning states turned down federal money rather than grow Medicaid. Arkansas used that money to buy private insurance for 200,000 people, and counting.

Now Arkansas is leading the nation in the reduction of its uninsured population. According to a recent Gallup poll, the percentage of Arkansans without insurance dropped in one year from 22.5 to 11.4 percent. The private option will bring $1.3 billion in federal funds to the state in 2015. Without it, rural hospitals would probably close, as they have in states that turned down the money.

But the private option is rightfully controversial. It has roots in Obamacare. While the federal government is paying for almost all of it now, the state’s share grows over time – supposedly to 10 percent, but who knows with the federal government these days? Legislative opponents say this is how the $18 trillion national debt keeps growing. Everyone always has a hand out.

Because the private option involves spending money, it must pass with 75 percent majorities each year, and it’s barely done that twice. This year did not look promising, so Hutchinson asked legislators to form the task force to consider not only how to change (and surely rename) the private option, but also to consider broader Medicaid reforms.

The 16-member task force by design is split between legislators who have consistently voted for and against it. If this were Washington, it would accomplish nothing, but Little Rock is not Washington. The sponsor of the legislation creating the task force, Sen. Jim Hendren, R-Sulphur Springs, expects it to make progress “because we’re going to act like grown-ups.”

Hendren has been a private option opponent because he believes it’s unsustainable at both the state and federal levels. However, he recognizes that the old system – lots of uninsured people getting charity care in emergency rooms – wasn’t working. Plus, you can’t just yank insurance away from 200,000 people. Plus, he’s Hutchinson’s nephew. So what now? Ideally, he said, the task force will create something that will “meet the needs of those people that need it and encourage them to improve their station in life, and we also do it in a financially sustainable way.”

For many reasons, the culture in Little Rock is much more collaborative than in Washington, D.C. Unlike in our nation’s capital, state legislators tend to meet somewhere in the middle. Moreover, the lines between private option supporters and opponents can be somewhat blurred, Hendren said. “Obviously we’re not going to have a society in Arkansas where people can’t get health care at all. It’s just a question of how we deliver that in an affordable way,” he said.

The task force’s other Senate members are Sens. David Sanders, R-Little Rock; Jason Rapert, R-Conway; Linda Chesterfield, D-Little Rock; Keith Ingram, D-West Memphis; Terry Rice, R-Waldron; John Cooper, R-Jonesboro; and Cecile Bledsoe, R-Rogers. House members are Reps. David Meeks, R-Conway; Joe Farrer, R-Austin; Justin Boyd, R-Fort Smith; Michelle Gray, R-Melbourne; Charlie Collins, R-Fayetteville; David Murdock, D-Marianna; Deborah Ferguson, D-West Memphis; and Kim Hammer, R-Benton.

They must produce their first report by the end of the year. They won’t “solve” health care, but they will produce something useful. No one will get everything they want, and they’ll accept that, like grown-ups.

Is America governable?

Debt and deficits, Education, Health care, Politics, State government, U.S. Congress

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

U.S. Capitol for blogThe American republic has limped past being dysfunctional and stumbled into being ungovernable. Even if you hate the government, this situation should concern you because it means big problems aren’t being addressed, while new ones are being created.

Two current legislative fights illustrate this reality – No Child Left Behind and the broken immigration system.

Congress has yet again stalled on its long overdue reauthorization of No Child Left Behind. That’s bad, because this law is completely unworkable. Signed by President George W. Bush in 2002 and passed with bipartisan support, it required that 100 percent of American students in grades 3-12 test at their grade level by the end of the 2014 school year, or the federal government would punish the schools where they didn’t. That’s every single child, regardless of language difficulty or intellectual challenge – a requirement so ridiculous that Congress ought to fix it, but it can’t. As a result, the Obama administration has been granting waivers to states telling them how they can disobey the law.

The president is supposed to enforce the law, and Congress is supposed to write laws that make sense, right?

The same applies to immigration. The president wants to ignore the laws Congress has passed, and Congress can’t agree on how to fund the Department of Homeland Security in response. Meanwhile, the border remains porous, and millions of people live in the shadows among us. Children brought here by their parents basically have no home country. Meanwhile, the United States quite effectively limits the influx of skilled overseas workers – exactly the people we need.

If these two issues were outliers, we could deal with them. Unfortunately, they’re the norm. A few other examples …

The national debt. Uncle Sam now owes $18 trillion, or the equivalent of $57,000 for each American. The debt has doubled since 2007 and tripled since 2001, and it’s still rising. The only possible solution is to reduce spending substantially while collecting more revenues somehow. There’s not a remote possibility that Republicans and Democrats in Washington will agree to do that.

Health care. Prior to the Obama administration, the United States already had the world’s most expensive health care system. It denied insurance because of pre-existing conditions and stopped paying for patient claims if they became too expensive. Then the Affordable Care Act was rushed through Congress, causing its own problems and leading to who-knows-what. Now the act faces a serious Supreme Court challenge over its wording regarding federal exchange subsidies. Pulling this leg from the stool could cause Obamacare to collapse. Lots of people would be happy about that, but … what’s the plan after that?

Infrastructure. The gas tax, which funds highways, has not been raised at the federal level since 1993. It is destined to produce less and less revenue because cars are becoming more fuel efficient through both market and government demands. Everybody knows the model is unsustainable, but there’s no agreement on its replacement.

It won’t be enough to vote for different people in 2016. Washington simply doesn’t work any more, regardless of who is in office.

That’s because Washington reflects American society, which itself is marked by contradictions and divisions. We simply don’t agree on how to solve problems, or even about what the problems are. We’re deeply divided culturally, morally, about what we want this place to look like, and about what we think it once was. That lack of consensus makes it very hard to solve difficult issues. Moreover, Americans say they don’t trust government but then choose to be profoundly dependent upon it, rarely recognizing the irony. The result is that we grow government without paying for it.

This is a depressing column, so let’s close with solutions. Congressional term limits? A balanced budget amendment? Campaign finance reform? All could help.

Meanwhile, many decisions should be returned to the state level, where democracy still manages to work sometimes. Red, blue and purple states could solve problems in their own ways, often learning from each other. Americans would be free to settle in states where they felt most comfortable.

This could cause its own problems, including irreconcilable legal definitions of discrimination and a race to the bottom on environmental regulations. A poor state like Arkansas might find its niche, or it might just get poorer.

Something big has to happen – bigger than the next election. When a country becomes ungovernable, problems can’t be solved simply by electing different people to that government.