How AHCA makes healthcare unaffordable

Some opponents of the Affordable Care Act (aka Obamacare) like to trash individual insurance policies sold on the exchanges for having out of pocket costs that make them too expensive to actually use and premium increases that make them too expensive to keep.

I’ve always been annoyed by this criticism because it doesn’t stand up to reality. That’s because the detractors ignore the cost sharing reduction (CSR) subsidies that sharply reduce deductibles and out-of-pocket payments for lower income individuals. More than half of individuals who buy coverage on the exchanges receive CSRs, so we are talking about a major part of the market.

As a new analysis by Avalere demonstrates, average deductibles for individuals at 100-150% of the federal poverty level (FPL) in silver plans are only $243 compared with $3703 for people who don’t qualify for CSRs. For maximum out of pocket costs, the figures are $978 and $6528 respectively.

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As for premiums, those increases have been absorbed by the federal government through increased subsidies for those who qualify and are not a deterrent to purchasing or renewing a plan.

Dismantling the ACA and replacing it with the American Health Care Act (AHCA) will eliminate the CSRs. The AHCA tax credits are stingier and not targeted based on need or premium cost. The enhanced flexibility plans have to modify benefits won’t make them more affordable, especially for those who actually need treatment.

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By healthcare business consultant David E. Williams, president of Health Business Group.

 

Trump presidency hurts economic growth

I disagree with the general sentiment that the Trump Administration is good for economic growth. While certain economic policies might be mildly positive, these are overwhelmed by negative economic and social policies, and by Trump’s disdain for democracy.

The Wall Street Journal’s survey of economists neatly sums up the conventional wisdom, concluding that the long-term growth rate of the economy could increase modestly –from 2% to 2.3%– if all of Trump’s agenda were implemented. The policies they focus on include infrastructure spending, rollback of regulations, and tax cuts. Even if we accept that these are the right things to consider, there are problems with the analysis:

  • Infrastructure spending, which if done right could provide the biggest boost, is unlikely to be enacted
  • Rollback of regulations may speed growth, but eliminating environmental regulations –as Trump has done– causes negative impacts on the environment that GDP doesn’t measure

But beyond this, we need to consider a variety of growth killers:

  • Dismantling Obamacare’s progress on universal coverage leads us back to “job lock” –where employees fear leaving their positions to start new businesses because they are worried about whether they or their dependents will be able to get insurance coverage due to pre-existing conditions. I started my business in 2001, well before Obamacare. When prospective entrepreneurs called me for advice, the number one concern about getting started wasn’t about business plans, financing, or hiring, but rather health insurance.
  • I put healthcare first (this is the Health Business Blog after all) but reducing immigration is what could really kill the economy. Consider:
    • Population growth drives economic growth; reducing net immigration directly slows growth
    • Many of the big job creating companies –think Apple, Google, eBay — were founded by immigrants. But we see this on a smaller scale, too. Of the four, fast growing healthcare companies whose boards I serve on, three were founded by immigrants (from Finland, Russia and Tanzania). Immigrants have higher rates of labor force participation and are more likely to start small businesses, too.
  • Erecting trade barriers hurts growth. Trade wars have no winners
  • There are a variety of non-economic policies and actions taken by Trump that are likely to harm long-term growth. I can’t think of any that help it. For example:
    • Undermining the rule of law and attacking democratic institutions such as the courts and Congress, while praising dictators. The US has long been a safe haven in economic and political crises due to its justified reputation for being a nation of laws, not men. Trump is throwing that away and is being abetted by the Republican leadership in Congress
    • Adopting harsher policies on incarceration for non-violent drug offenders, which reduces the workforce
    • Creating uncertainty on policy by flip flopping dramatically on. It’s hard to plan and invest in those cases

I’m convinced Trump harms growth. If I turn out to be wrong I’ll be the first to admit it.

Urgent care clinics just for cancer patients

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It’s tough being a cancer patient. The illness is serious and sometimes fatal, treatments can have serious side effects, and the fatigue and stress can be overwhelming. It gets worse when patients end up in the emergency room where they are exposed to people who may be contagious and encounter medical staff who may not know how to address the special needs of an oncology patient.

So I was heartened to read about urgent care centers specifically for cancer patients. Centers like the one at University of Texas Southwestern Medical Center in Dallas cater to the requirements of cancer patients. They provide same-day appointments, are open early and late, and coordinate with the rest of the patient’s oncology care givers. It’s a good example of patient-centered care.

Of course there are some strong economic incentives as well (hospitals aren’t doing this for their health, so to speak). Cancer patients are lucrative for hospitals –that’s one reason you hear so much advertising for cancer care. And hospitals are wise to treat their best customers well to encourage loyalty. In the value-based care era, we can also expect pressure for hospitals to improve outcomes, control costs and improve the patient experience of care. Urgent care cancer centers contribute to addressing all these goals.

It does raise the question of why only cancer patients get their own urgent care while the rest of the population has to put up with all the challenges and downsides of the regular healthcare system. Perhaps other parts of the healthcare system can learn from these urgent care centers and emulate them more broadly.

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By healthcare business consultant David E. Williams, president of Health Business Group.

Sorry, Republican Congress. Health care is complicated

As the GOP is still learning, healthcare is complicated. It was easy to throw darts at the length and complexity of the Affordable Care Act, but the truth is the law hangs together remarkably well and is long for a reason. Meanwhile, some of the GOP’s main proposals are easy looking, digestible concepts that can be explained at the 5th grade reading level. Unfortunately, they won’t achieve their goals or are counterproductive.

Here are a couple that are swirling around this week:

  1. Get rid of mandatory benefits so that people don’t have to buy more than they want or need. After all why would a man need pregnancy coverage or mammography screening? Sounds good, but it turns out that those mandatory benefits only drive costs to a small degree. The main drivers of premium increases are rising provider reimbursements and higher utilization of people with pre-existing conditions who are now able to get coverage. Sure, if you remove coverage for hospitals, doctors or prescriptions premiums will drop, but what kind of insurance would that be?
  2. President Trump is threatening to withhold subsidies that help low-income Obamacare customers pay their out-of-pocket expenses. Sounds like a hawkish budget move. But it turns out the maneuver would actually increase federal spending. That’s because health plans would end up raising premiums and federal subsidies would automatically increase as a result.

There are more examples. Here are a couple:

  • Selling health insurance across state lines. It’s already allowed but no one wants to do it because it doesn’t make economic sense.
  • Rejecting the Medicaid expansion. Some states say they can’t afford it, which is nonsense since the feds pay the vast majority of the cost. If they stop states could just cancel the expansion.

 

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By healthcare business consultant David E. Williams, president of Health Business Group.

Partners buys into Rhode Island: I’m quoted in the Boston Globe

Partners HealthCare plans to purchase Care New England in Rhode Island. Not a surprising move, considering  that Partners wants to continue to expand but is running into roadblocks in Massachusetts. Rhode Island is practically down the street.

I’m quoted in the Boston Globe’s coverage (Partners to acquire R.I.’s Care New England)

“This is a logical move for Partners, which has received strong pushback in its recent attempts to expand in Massachusetts, but is less likely to face the same pressures in Rhode Island,” said David E. Williams, the president of Health Business Group, a Boston consultancy. “The acquisition is geographically close to Partners’ existing network, and they already have a clinical collaboration. Rhode Island regulators will likely appreciate Partners’ financial strength and the stability it is likely to promote.”

By healthcare business consultant David E. Williams, president of Health Business Group.

USPSTF adopts my reasoning on PSA screening for prostate cancer

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Which way on PSA?

I oppose over-testing and over-treatment, so I really had to think hard five years ago when I turned 45 and my doctor offered PSA screening for prostate caner. The US Preventive Services Task Force (USPSTF) had just come out against PSA screening, concluding that the harms outweighed the benefits.

Nonetheless (Why I decided to get a PSA screening test for prostate cancer), I did go forward. As I wrote:

I know that PSA is a very imperfect indicator. I definitely want to avoid the stress and possible discomfort of having a biopsy. I’m worried about false positive and false negative biopsy results. And I don’t relish the significant potential for incontinence, impotence, or bowel problems from treatment.

But at this stage of my life I am willing to accept a significant risk of morbidity in exchange for a small reduction in mortality risk, which is my impression of what my choice to have the PSA test means. In 10 or 20 years I probably won’t feel that way. And I hope there will be better detection, follow-up and treatment options by then.

I’m also confident in my ability to make informed choices with my physicians along the way. The PSA test itself was done as part of routine blood work and there was no additional risk from that. My doctor and I agreed that if the PSA is elevated we’ll discuss what to do next. At that stage I’ll also have the chance to do more research and get more opinions if necessary. I’m not automatically going to get into a cascade of follow-up and treatment.

Now the USPSTF appears to be coming around to my way of thinking. In particular, they note that more men are choosing “active surveillance,” i.e., keeping a close watch rather than jumping straight to aggressive treatment.

The choice about whether to undergo PSA testing and what to do once results are in is a great opportunity for shared decision making. And this is what should be encourage.

By healthcare business consultant David E. Williams, president of Health Business Group.