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The Medicaid X Factor

October 28, 2011
9:38 am

As a study published in Health Affairs this week points out, anyone who believes they have a handle on what will happen when Medicaid undergoes an unprecedented expansion this decade is kidding themselves.

The study by a trio of professors at Harvard University’s School of Public Health shows a huge possible variation in the number of low-income Americans who enroll in Medicaid once eligibility is expanded in 2014 to include anyone below 138 percent of the federal poverty level.  The expansion, according to the researchers, could be as low as 8.5 million individuals or as high as 22.4 million, with a range of possible federal spending increases from $34 billion to $98 billion annually.

What I find particularly interesting about this study, though, is the projected impact on healthcare utilization.  Because Medicaid has lower cost-sharing than private insurance, there is an expected increase in the demand for health services among those who move from private plans to Medicaid once eligibility levels change.  Between the larger Medicaid population and this increased utilization, the Harvard researchers say the U.S. will need anywhere from 4,500 to 12,100 additional physicians to care for new Medicaid patients.

Here’s a critical passage in the report:

“These changes may pose major challenges in healthcare access because in recent years an increasing number of physicians have stopped accepting Medicaid patients.  The Affordable Care Act does provide enhanced Medicaid reimbursement to primary care clinicians for 2013-2014, but this may not be enough to ensure an adequate supply of providers for new Medicaid patients.”

Some of us have continued to argue that coverage does not necessarily mean access.  It is, without question, vitally important to provide coverage for the nation’s uninsured population, but it’s still an open question as to whether Medicaid expansion is the most effective tool for doing so.

An Idea Whose Time Has Never Come

October 21, 2011
1:53 pm

It used to be that congressional debates over prescription drug importation drew a great deal of national attention and featured very close outcomes. 

That’s no longer the case.  This week, a U.S. Senate vote on an amendment to allow prescription drug importation from Canada slipped by virtually unnoticed.  Only 45 Senators voted for the measured offered by Senator David Vitter (R-LA), falling far short of the 60 needed for passage.

Could it be that drug importation has become an idea as out of touch with the times as it is…well, simply bad?

At a time in which global concerns have grown over trafficking of dangerous, counterfeit drugs, it makes little sense to open our borders to medications coming from other countries’ warehouses and shipping points that U.S. authorities can’t adequately monitor.

Also, there is little need for imported drugs when the Medicare Part D program is making medicines extremely affordable for the nation’s seniors, and U.S. pharmaceutical companies have programs in place to provide low-cost pharmaceuticals to citizens with the greatest financial need.

Those arguments were made during the Senate debate, but there was another argument that I wish I had been made more frequently and powerfully.

The reason prescription drugs cost less in other countries is because those governments impose price controls instead of allowing the market to set prices.  If the United States were to import those drugs, we would also be importing those government price controls.  Every politician in America says they want more innovation, more development of disease cures and life-enhancing medicines, yet some also want to import other countries’ price controls that would drastically cut the resources necessary for research and development.  We can’t have it both ways.

No Kidding Around on Wellness

October 18, 2011
10:59 am

This past Sunday, Ezra Klein had a fascinating piece on the Washington Post website regarding the Cleveland Clinic (a Healthcare Leadership Council member) and its efforts to achieve a higher degree of wellness within its workforce.

In Cleveland, Clinic CEO Delos Cosgrove has essentially declared war against preventable chronic disease.  Smoking is completely banned anywhere on the campus (and, in fact, physicians have been fired for violating this prohibition), deep fryers and sugared sodas have been removed from the Clinic premises, and Clinic employees pay higher health insurance premiums if they don’t take part in some form of fitness or stress management classes.  Employees’ health conditions – blood pressure, blood sugar, weight and other measurable – are monitored to make sure they are being proactive in improving their health.

The results, as Klein writes, are indisputable.  The Clinic has reduced its employee healthcare costs.  Smoking rates and blood pressure are way down.  Employees have lost a collective 125 tons of weight since 2005.

There will undoubtedly be disagreements over whether the Clinic’s tough love approach is an appropriate policy.  And if the same policies were brought to a large non-healthcare workforce like a General Motors or a Xerox, one could even project that there would be charges of discrimation against smokers, the obese and people who just happen to love a Wendy’s Baconator.

But this is a conversation that America needs to have.  At the same time in which policymakers are debating whether to cut reimbursement levels in the Medicare program, affecting access to quality care and medical innovation, there are billions of dollars being spent to treat cases of diabetes, heart disease, pulmonary illness and other conditions that are caused or exacerbated by lifestyle choices.

Employees and healthcare providers throughout the country are developing innovative ways to strengthen wellness and prevent chronic disease.  We’ve chronicled many of the very effective ones in the HLC Wellness Compendium.

If the Cleveland Clinic’s aggressive methods on employee wellness stir a widespread debate, that’s a very good thing.  The Center for Disease Control and Prevention projects that one of every three Americans will have diabetes by the year 2050.  If that occurs, today’s healthcare cost concerns will seem like child’s play compared to what we’ll be facing later this century.  Wellness has to become a national priority.

USA Today and Medicare: The Hits, the Misses and the Absences

October 04, 2011
10:23 am

Yesterday, USA Today devoted its front page to a topic many of us have been discussing intensely for some time – how to address Medicare’s escalating costs. 

The newspaper listed five ways to “squeeze” Medicare spending and then discussed the political arguments for and against each.  Some, such as gradually raising the Medicare eligibility age from 65 to 67 and requiring higher-income beneficiaries to pay full premiums for their Medicare Part B (physician services) and Part D (prescription drug) coverage are recommendations that the Healthcare Leadership Council has made to the congressional deficit reduction “super committee.”

But, in a number of ways, the USA Today article missed the mark:

•      In discussing cutbacks to Medicare providers, including physicians, hospitals and pharmaceutical companies, the newspaper expanded on the likelihood that those health sectors would strenuously argue against any cuts, but there was no reporting on the impact those reductions would have upon beneficiaries.

This is a pet peeve of mine, as I’ve noted previously.  Too often, both politicians and commentators speak of the value of cutting providers instead of patients, obscuring the fact that reduced payments to providers has an impact on both the accessibility and quality of healthcare.  If, as the Obama Administration has proposed, pharmaceutical companies are required to send over $100 billion in rebates back to the government, can there be any other outcome besides higher prices for consumers and less money available for research and development of new innovative medicines?

Relating to another sector, there was an interesting discussion on the KevinMD blog yesterday that raised legitimate questions over whether cutting physicians’ incomes will make a dent in overall healthcare spending.

•      Aside from a quick reference to the controversy over Congressman Paul Ryan’s (R-WI), USA Today quickly dismissed the idea of giving Medicare beneficiaries greater consumer choice among competing health plans, citing one study that showed it would increase out-of-pocket costs.

The concept deserves more consideration than that.  If, as the Healthcare Leadership Council and experts like former Clinton budget director Alice Rivlin has proposed, you give beneficiaries the choice of staying in conventional fee-for-service Medicare or moving into a new competitive Medicare Exchange, both health plans and providers would be compelled to find innovative ways to reduce costs while maintaining high quality and value.  This is a pro-consumer direction that deserved more than a couple of sentences in a major story on Medicare costs.

•      Where was any reference in the USA Today story to medical liability reform?  Fixing our nation’s broken medical malpractice system won’t, by itself, fix Medicare’s long-term fiscal problems, but reducing the practice of defensive medicine to protect against exposure to litigation will certainly generate meaningful savings.