Healthcare News Week in Review

The ACA Repeal 

Multiple outlets reported on the release of the Senate’s Obamacare repeal bill, named the Better Care Reconciliation Act (BCRA).  Like the House bill (the American Health Care Act, or AHCA), BRCA would wind down federal funding of the Medicaid expansion, albeit over a few years.  In the long term, however, it would actually cut the program more deeply by reducing the rate of growth of Medicad’s new per capita payments, beginning in 2025.  Like the AHCA, it would repeal almost all of Obamacare’s taxes, mainly benefiting the rich and healthcare corporations.  Also like AHCA, it would eliminate both the individual and employer mandate, although unlike it there would be no penalty for being uninsured, as well as no risk rating.  It would additionally broaden Obamacare’s waiver program, which would allow states to fundamentally restructure their individual insurance market, for instance they might choose to eliminate the requirement that health plans cover all essential health benefits or have a particular actuarial value.  I described the bill in a negative light in the Guardian, where I compared it to cyanide, a vampire, and (you’ll have to read it) water crackers.

Vox [06-19-17, Dylan Scott] interviewed almost 20 lobbyists and other healthcare experts, and reports that the healthcare industry has deliberately chosen to not strongly oppose the Obamacare repeal, as seen by the absence of any sort of PR blitz, unlike with previous legislative healthcare fights.  In part the industry wants to continue to be able to influence the Trump administration’s agenda, and in part it does not want to provoke its wrath, Scott suggests.  Notably, the repeal of Obamacare means different things for different healthcare sectors, though many sectors stand to gain from tax breaks contained in both the House and Senate bill.

Modern Healthcare [06-22-17, Shelby Livingston] describes how the BCRA could prove highly profitable for many insurers, insofar as it repeals the ACA’s taxes on insurers, increases the age band (allowing older individuals to be charged higher premiums), temporarily extends cost-sharing subsidies, provides some $112 billion to stabilize insurance markets, and permits states to set the set their own medical-loss-ratio (potentially allowing insurers to spend a lower percentage of premiums on healthcare).  On the other hand, the law could hurt insurers who mainly are in the business of insuring low-income individuals via Medicaid HMOs.

Reuters [06-22-17, Lewis Krauskopf] reported that healthcare stocks—including insurers—shot up sharply in the wake of the release of the Senate Obamacare repeal bill, BCRA.

Vox [06-23-17, Nicholas Bagley] carried an article exploring the potential implications of BCRA’s “crazy waivers.”  According to Bagley, a provision in BCRA would widen the waiver clause of the ACA enormously, essentially giving any state the ability to obtain a waiver as long as it doesn’t improve the deficit.  As he describes, this could allow states to eliminate all sorts of insurance protections, including out-of-pocket maximums and essential health benefits; additionally, it could also potentially effectively eliminate annual and lifetime limits of insurance coverage, not merely in the individual market in one state, but for everybody—throughout the country.

Vox [06-23-17, Dylan Scott] reported on how the insurance industry is reacting to the ongoing Obamacare repeal.  Scott notes that there are many things that insurance companies like about the BCRA, particularly its repeal of the ACA’s taxes and the money provided for a stabilization funds.  Although there are some provisions that could be bad for insurers’ bottom lines, Scott quotes from investment analysts who describe it as a positive.

 

Single Payer

 The Washington Post [06-18-17] had an editorial arguing that single payer had an “astonishing” price tag, and could only generate real savings cuts by reducing “standards of access and comfort” for patients, reducing physician pay, and closing rural health facilities.

I wrote a response to the Post’s editorial in Jacobin].

 

Pharma

STAT [06-23-17, Damian Garde and Adam Feuerstein] report how the Food and Drug Administration’s approval of betrixaban (trade name: bevyxxa) despite a failed phase 3 trial might signal the beginning of a laxer era at the agency, now headed by Scott Gottlieb.

 

Health News from the Week, June 11-17

The ACA

The New York Times [06-11-17, Reed Abelson] reports how repeal of the ACA would negatively impact a particular group that benefited from the ACA—those between jobs, or who for whatever reason lose their employer-provided coverage.  As the Times notes, the ACA gave many individuals greater flexibility by allowing them to purchase subsidized health insurance plans when out of work; under the House GOP plan, however, these plans may be risk-rated based on pre-existing conditions, and might be prohibitively expensive.

The Washington Post [06-12-17, Amy Goldstein] reports how Iowa is seeking to radically restructure its ACA marketplace in the face of the possible departure of all insurers from the state.  The Post states that the proposed plan would involve the abolition of Iowa’s marketplace, and would allow individuals to use subsidies to buy plans off the exchanges. It notes that the legality of this change outside the context of a 1332 waiver is unclear.

USA Today [06-12-17, Eliza Collins] describes how the drafting process of the Senate’s Obamacare repeal bill is cloaked in secrecy, with rank-and-file Republicans unaware of its contents.  The bill, USA Today notes, will be handed over to the Congressional Budget Office for scoring before it is made publicly available; it may include a somewhat slower phase-out of the Medicaid expansion as compared to the House bill.

Axios [06-12-17, Caitlin Owens] reports that the Senate Republicans are not planning to make a draft of their healthcare bill publicly available.  “We aren’t stupid,” a senior Senate Republican aide told Axios.  The outlet notes that the bill will be sent to the CBO, with a possible vote prior to the July 4 recess.

 Vox [06-14-17, Jeff Stein] reports on the left-wing groups leading the resistance to the Senate GOP’s healthcare law.  The article describes how town hall protests and a barrage of phone calls to lawmakers may have helped derail the House GOP’s initial attempt to pass the American Health Care Act in March.  It also notes a split between Democratic Senators and activist groups on a tactical issue. By withholding “consent,” activists contend that Senate Democrats could stop all Senate business and slow down passage of the law, buying more time to defeat it; some Senators, however, argue that this would have no sustained beneficial impact.

 

Medicaid

The Wall Street Journal [06-11-17, Arian Campo-Flores] describes how Kentucky—a state that had especially benefited from the Affordable Care Act, in particular through a robust Medicaid expansion—is looking to now retreat from those reforms.  As the Journal notes, Governor Matt Bevin is seeking a waiver from the Centers for Medicare and Medicaid Services that would allow—among other things—the state to require premiums from Medicaid participants, one of a number of changes that are expected to substantially shrink the program (head of CMS Seema Verma helped design this proposal, and has recused herself from the decision on its approval).

Modern Healthcare [06-12-17, Virgil Dickson] describes how Indiana’s approach to adding a work requirement for Medicaid participants—a change also being pursued by Maine, Kentucky, Arizona, and other states—may have skirted legal requirements for public comment.  Indiana’s Medicaid expansion, dubbed HIP 2.0, was designed by now CMS head Seema Verma, and represented a major departure from traditional Medicaid, requiring premiums from participants and kicking some out of the program for failure to pay.

 

 

 

Pharma

The New York Times [06-11-17, Abby Goodnough and Kate Zernike] reports how the maker of a  long-acting injectable opioid antagonist (trade name Vivitrol) has aggressively marketed its product as superior to less expensive agents that are used to treat those with opioid dependence—suboxone and methadone—without evidence to back up these claims. The Times note that the maker of the drug has put money into influencing legislators, policy makers, and judges to expand its use in supervised drug treatment programs, where it may be the only allowed option.

Bloomberg [06-12-17, Suzanne Woolley] reports that high healthcare costs are translating into booming business for crowdfunding platforms like GoFundMe, which may stand to benefit from a Republican Obamacare repeal that increases the number of uninsured. It notes that for one crowdfunding company, some 70% of campaigns were for healthcare fundraising.

Kaiser Health News [06-16-17, Emily Kopp] described how President Donald Trump’s “Drug Pricing and Innovation Working Group” has been heavily influenced by individuals and ideas straight from the pharmaceutical industry (the group is led by a former lobbyist for drug giant Gilead, for instance).  KHN obtained documents that demonstrate that the group has been focusing on a number of “principles” that would be highly favorable to industry and would be unlikely to do much about drug costs, including stricter enforcement of drug patents overseas, lower standards of evidence in clinical trials, reducing drug discounts for safety-net hospitals, and allowing drug companies to give information on off-label use of drugs to insurers before drugs are approved by the FDA.

Health News Round Up, early June

Some recent notable healthcare news:

The New York Times [06-01-17, Robert Pear] reported that the Trump administration is moving to revise a federal rule that could result in the loss of contraceptive coverage for hundreds of thousands of women.  While the Supreme Court”s Hobby Lobby decision had given “closely held” corporations the option to not cover contraception on religious grounds, the Times describes that the Trump rule would extend this exemption to other sorts of for-profit corporations as well as not-for-profit organizations, and also to widen the grounds for the exemption beyond religious reasons alone.

The New York Times [06-06-17, Reed Abelson] reported that Anthem was abandoning the ACA marketplace in Ohio, a move that could leave up to 10,500 people in the state uninsured.  This comes on the heels of marketplace departures by a number of other carriers, which the Times notes is being used as evidence by Republicans that the ACA is in a death spiral.

The New York Times [06-08-17, Robert Pear] reported that the chairman of the House Ways and Means Committee Kevin Brady (R-TX) has now called for Congress to fund these cost-sharing subsidies.  The subsidies lower out-of-pocket spending for those who purchase ACA marketplace plans and earn less than 250% of the federal poverty level.  As noted by the Times, a Federal District Court found that governments payments to insurers to cover the cost-sharing reductions was illegal.  Payments have thus far continued while the decision is being appealed, but the Trump administration has threatened to end them, contributing to turmoil in the ACA marketplaces.

Politico [06-08-17, Adam Cancryn, Jennifer Haberkorn, Burgess Everett] describes difficulties facing Senate Republicans as they aim to forge a compromise ACA repeal bill that satisfies both their more conservative and more moderate members.  While, as Politico notes, the Senate bill is likely to slow the rate of Medicaid cuts (as compared to the House bill) and to increase marketplace subsidies for older enrollees, reaching consensus may be difficult if the Senate is to vote on the bill by July 4, as Majority Leader Mitch McConnell has promised.

Vox [06-09-17, Sarah Kliff] reported that some 38,000 individuals—spread among 47 counties in three states—who are now enrolled in ACA marketplace plans may have no health insurance options in 2018 as more insurers withdraw from ACA marketplaces, a development stemming in part from actions of the Trump administration’s, like its threat to end payments to insurers for ACA cost-sharing reductions.

Blog: A Brief Response to Dave Kamper’s “Taking Single Payer Seriously” in Jacobin

Yesterday in Jacobin, Labor organizer Dave Kamper had a good article arguing that single-payer supporters need to have a more robust plan ready to deal with the expected displacement of administrative and billing workers that would result from implementation of a Medicare-for-All system.  As he puts it:

Medicare for All wouldn’t just scrap Obamacare — it would uproot the entire industry. It would be a huge efficiency savings. But it would also be devastating in the short term for hundreds of thousands of working people whose only crime was getting a job at an insurance company, and the hundreds of thousands more who work as billing specialists for clinics and hospitals…

And Kamper is correct here.  The elimination of administratively inefficient private health insurers, the transition to global budgeting of hospitals, and simplified billing requirements for physicians’ practices would translate into huge efficiency savings, which is part of the very raison d’etre of single-payer.  The latest number on administrative savings from David Himmelstein and Steffie Woolhandler, published in the Annals of Internal Medicine, is $503.6 billion/year.

This clearly would result in job losses for billers, coders, and insurance workers on a significant scale, and so a concrete plan to deal with this displacement is necessary.  Now, as Kamper notes, Representative John Conyers’ HR 676 “Medicare-for-All” bill does have an explicit plan for this: it would provide these workers with salaries for two years as well as prioritized job training.  Perhaps that is not enough, as he contends.

But I would take slight issue with one aspect of Kamper’s argument, which seems to suggest that efficiency savings in single-payer would result in job losses beyond administrative workers to the larger healthcare workforce (he notes, as one example, that we may need fewer MRI machines).

This issue actually relates to the broader debate about the costs of single-payer healthcare that is currently ongoing.  I and others argue that in the short term, we should not expect major net savings from single payer.  Yes, there will be large savings on administration and on pharmaceutical expenditures, but at the same time, we are going to be providing more healthcare overall, not less.

Currently, 28.6 million people in America lack health insurance coverage.  The uninsured are going to use more care, more medications, and more services of every type (potentially including more MRIs!) once they are insured (although there are supply constraints that limit this on the system-wide level).  And the elimination of cost sharing for the rest of us—together with the inclusion of new benefits that today are often uncovered, like universal dental care and long term care—are also going to cost money and require a larger, not a smaller, clinical workforce (points made here and here and elsewhere).

The idea here is that efficiencies balance new costs, not that we suddenly slash overall US healthcare expenditures as a percent of GDP to Canadian levels (although moving forward, cost growth can certainly be better controlled on single-payer, which may be the most important issue, and does not have the sorts of workforce implications under discussion here).

In other words, while we need less billers and coders and clerks, we will most likely need more clinical workers.  Retraining non-clinical healthcare workers to be clinical healthcare workers may not always be possible, but it is not impossible either.  And with overall healthcare spending remaining roughly unchanged during the transition to single-payer, there would no reason to predict disruptive changes to the communities that are based around large healthcare delivery systems.

I agree with Kamper “that any attendant growth in federal employment would need to be funneled back into the same communities that shed jobs.”  However, the transition to single-payer will simply not be akin to the fall of manufacturing in the neoliberal era: think more of a deliberate, thoughtful transition from fossil fuels to green energy than the gutting of an entire industry.

Lancet series: “America: equity and equality in health”

Yesterday, the Lancet published a new series “America: equity and equality in health.”  It is available online for free (you need only to register on the site).  In addition to the five papers (below), there is an accompanying editorial as well as comments from Senator Bernie Sanders and Thomas Sequist.  I had the pleasure of co-writing the paper on the Affordable Care Act with colleague/mentor, Dr. Danny McCormack.  The papers are:

  • “Inequality and the health-care system in the USA”,  Samuel L Dickman, David U Himmelstein, Steffie Woolhandler
  • “The Affordable Care Act: implications for health-care equity,” Adam Gaffney, Danny McCormick
  • “Population health in an era of rising income inequality: USA, 1980–2015,” Jacob Bor, Gregory H Cohen, Sandro Galea
  • “Structural racism and health inequities in the USA: evidence and interventions,”   Zinzi D Bailey, Nancy Krieger, Madina Agénor, Jasmine Graves, Natalia Linos, Mary T Bassett
  • “Mass incarceration, public health, and widening inequality in the USA,” Christopher Wildeman, Emily A Wang