RIP, Obamacare

Posted by & filed under CGR Staff.

Kent Gardner We stand watch at Obamacare’s bedside, filled with uncertainty about the timing of its demise and what will follow. There are good deaths and bad deaths—good ones are peaceful and offer time for reflection and fond farewells. Bad deaths are filled with misery and leave behind discord, estrangement and confusion.

Born of compromise

Although the Patient Protection and Affordable Care Act (ACA) passed without Republican support, it did not emerge full grown from the head of Obama. Unlike the Clinton Health Care Reform, the Obama Administration consulted with and received the support (mostly) of the American Hospital Association, the American Medical Society, America’s Health Insurance Plans (AHIP), Pharmaceutical Research and Manufacturers of America (PhRMA), Consumers Union, and many other interested parties. The Obama Administration did not want to resurrect the AHIP-funded Harry & Louise ads that doomed the 1993 Clinton plan. Born of compromise, ACA was a frail child.

Each of the interested parties got something in exchange for their political support. AHIP won the personal and employer coverage mandate and dodged the “Medicare for All” public option. AHA, courtesy of the “out of pocket maximum,” hoped for fewer bankruptcy-driven write-offs. PhRMA escaped negotiated drug prices. AMA’s support bought a long list of free preventative services, like annual physicals and screenings. Consumers advocates won community rating coupled with an end to “pre-existing condition” exclusions.

Rejecting the “single payer” models of the United Kingdom and Canada, the ACA retained private insurance and provider markets, imitating the health care systems of many of our trading partners, e.g. Germany, France, Japan and Switzerland. While private, the payers and providers in these countries are subject to comprehensive price regulation. Read more »

Should we tax medical devices?

Posted by & filed under CGR Staff, Rochester Business Journal.

Kent GardnerLike most aging runners, my wife’s knees aren’t what they used to be. Fortunately, there is a solution to this problem—knee replacement has become nearly routine surgery.  The Agency for Healthcare Research and Quality reports 718,000 hospital stays in 2011 were due to “knee arthroplasty” or total knee replacement. The rate per 10,000 population nearly doubled from 1997. Yes, the aging of the population has something to do with the increase—yet even among 65-84 year olds the rate increased by 59% (http://www.hcup-us.ahrq.gov/reports/statbriefs/sb165.jsp). And yes, the rising rate of obesity explains part, but not all, of the trend.

We needn’t look to sophisticated studies for the reason as joint replacement surgery can significantly improve quality of life. A 2011 “meta analysis” of over 100 studies concluded that nearly 90% of artificial knees were still doing the job 10 years after surgery. As these studies necessarily involved surgeries that took place before 2000, results have almost surely improved. For most patients, an artificial knee (or hip) can be expected to last 15-20 years. Recovery time is getting shorter, too. Many patients are back to driving in a month. If you can’t walk without pain, an implant would seem to be an easy choice.  Provided you can convince your insurer to foot the bill.

Which brings us to the cost of artificial joints. Did you wonder why the medical device industry gets its very own tax under the Affordable Care Act? American health care’s dysfunction has enabled the medical device industry to earn very robust profits, thus making it a target for special treatment. Does this tax make sense? Read more »

Rochester Has Lowest Monthly Premiums in the Affordable Care Act’s Exchange

Posted by & filed under CGR Staff, Rochester Business Journal.

Kent GardnerThe health insurance mandate, probably the most visible outcome of the Patient Protection & Affordable Care Act (ACA or Obamacare), goes into effect in January. Enrollment in the health insurance exchanges opens October 1, so much attention has been focused on the premiums: Supporters of the law hope for lower rates; opponents have been widely predicting that rates would soar.

In July, premiums for New York State’s Health Insurance Marketplace were released and revealed two notable facts: First, premiums in the individual market are far below current rates. Second, Rochester has the lowest rates in the state. Read more »

“Affordable” Care Act Won’t Be—If We Can’t Control Cost

Posted by & filed under CGR Staff, Rochester Business Journal.

Kent GardnerThe Supreme Court—through the actions of tie breaker Chief Judge John Roberts—has resolved the constitutionality of the Patient Protection and Affordable Care Act (ACA). In the best tradition of the court, his Solomonic ruling declares that the law is within the powers of Congress. Good law? Bad law? “Not my problem. It’s constitutional.” He also applied the “duck” test to the Administration’s “penalty”—if it looks like a tax and quacks like a tax, it’s a tax.

The constitutional sideshow behind us, let’s get back to the Main Event: Health care remains an unaffordable, inequitable mess. ACA addresses some of the coverage problems built into the American health insurance model, but it will inevitably create some inequities of its own.

Cost is still an enormous problem. In fact, the law will increase the share of GDP spent on health care. ACA’s supporters are eager to report the Congressional Budget Office (CBO) finding that the law will not increase the deficit. First, remember that this is a forecast built on complex models, loaded with assumptions. The CBO finding is an estimate, not a measurement. Read more »

Health Care Legislation: Only Half a Reform

Posted by & filed under CGR Staff, Rochester Business Journal.

Jim FatulaKent GardnerCongress is edging closer to passing legislation that restructures health insurance. The Senate and the House are debating compromise bills within their houses, after which a conference committee will seek to reconcile differences between them. With these details still under debate, we conclude our six part series on health reform with a few observations.

Public Option. If private insurance plans are part of the problem, then one solution may be to offer another option, a health insurance plan that is run by the government. At this writing, a “public option” seems likely to survive and become part of the final legislation. The debate over the public option has highlighted a fundamental social tension between those who fear too much government and those who fear too little (discussed in the first column in this series). Like Goldilocks, each of us wants the balance to be “just right.”

Read more »

Cost & Coverage on a Collision Course?

Posted by & filed under CGR Staff, Rochester Business Journal.

Kent GardnerMy 84 year-old mother has a bad back.  She’s way beyond surgery, and her doctors are just trying to manage the pain.  So every six weeks or so she goes back to the pain doc and he tries something else—a shot of cortisone this time, a nerve block the next, radio frequency ablation on the third visit (you’ll have to google it, I’ve got a word limit . . .).  There is always something else to try.

She’s weary of the pain and becoming convinced that her case is hopeless. Yet my frugal mother also worries about the cost—“I can’t believe that Medicare keeps paying for all of this.  I get these bills for thousands of dollars—but at the bottom, it says I owe $2.11.” As her son, I’m delighted that Medicare keeps paying and I hope that this process of trial-and-error eventually produces a solution.

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