Wednesday, July 29, 2015

Empowering Consumers to Prevent Disease

Today I have 2 items on my reading list:

One, “How to User in a New Era of Preventive Health Care, by Elizabeth Holmes, founder and CEO of Theranos, a consumer health-technology and medical –laboratory services company, Wall Street Journal, July 29, 2015. In her piece, she states, “Laboratory tests drive 70% if all clinical decisions. They’re used to determine whether a patient should start taking medication and, if so, which one, They help doctors decide whether a patient should undergo medical procedures or be admitted to a hospital. And they’re used to identify an individual’s risk of developing health conditions such as diabetes or heart disease,” She concludes “ People should be able to get any lab test on their own. Waiting for symptoms to a doctor’s order may be too late.”

Two, the second is Start-Up Nation: Story of Israel’s Economic Miracle, by Dan Senor and Saul Singer, two journalists who report on the Middle East (A Council of Foreign Relations Book, 2009). The authors say of their book. “If there is one story that has been largely missed despite the extensive media coverage of Israel, it is that key economic metrics demonstrate Israel represents the greatest concentration of innovation and entrepreneurship in the world today.”

It might be argued that Silicon Valley, where Ms. Holmes hangs out, has an even greater concentration. The Obama administration has largely missed the power of innovation and entrepreneurship in reforming health care. CMS has an innovation center, but it mostly concentrates on developing Accountable Care Organizations and other organizational concepts that save the government money. And it levies a 2.3% tax on medical innovation companies’ profits.

I would like to pick up on Ms. Holmes idea and extend it.

Why not empower consumers to order their own battery of lab tests in a consumer-friendly setting, couple that order information with age, gender, vital signs and physical information (BP, pulse, weight, height, and blood Oxygen, and symptoms if any, and generate a report for consumer’s eyes only, using current available algorithms, to indicate the patients degree of health for their age and gender.

The report could be something called the Health Quotient ( normal range 75 to 125), the analogue of the IQ, and could indicate in plain language the state of their health, how to interpret the results, what to do if anything, and whether to consult with a physician. The consumer would own this report and could use it as a barometer of their health and whether it contains useful information to prevent disease. For this idea to work, consumers would have to be able to access the tests and vital data in accessible locations at an affordable price, which I believe could be in the $50 range. They could then use the report to present to their physician.

Sunday, July 26, 2015

Magnitude of U.S. Health Care

When you think of the magnitude of American health care, and old, healthy and sick, insured and uninsured, legal and illegal, employed and unemployed, rich and poor but mostly middle class.

America spends $3 trillion on health care, $9375 per person.

The government at CMS (Centers for Medicare and Medicaid), spends over $1 trillion for its Medicare 55 million and Medicaid programs 70 million, $8000 per enrollee.

Americans spend $1.05 trillion on hospital care, and $0.75 trillion on physician care.

Of the money spent, $1.5 trillion comes from government, $1.5 trillion from private sources, and government share is growing.
There are roughly 300,000 primary care physicians in U.S, one for every 100 citizens , and roughly 200,000 nurse practitioners and 100,000 physician assistants, with the numbers of these midlevel practitoners expected to double in next decade.

For U.S. citizens without ready access to primary care physicians, non-emergency room alternatives for routine care include retail clinics in pharmacy and grocery chains, 1900, one for every 16,800. Americans, and urgicare centers, 6400, one for every 5000 Americans. Most retail clinics and urgicenters are in heavily populated centers, not in rural areas.

Of total Americans employed, 9.0% are in health care, the largest single employment sector. One of every 8 Americans is employed in health care. Hospitals employ over 6 million Americans and over 200,000 physicians.

Saturday, July 25, 2015

What Will the ObamaCare Legacy Be?

When President Obama steps down in 2016, what will be the legacy of his signature domestic program? What will ObamaCare leave in its wake? What will be its lasting effects?

One, will it be consolidation of insurers and hospitals into giant entities
? Larry Robbins, who runs Glenview Capital Management LLC, a hedge fund, thinks so. In 2010, after ObamaCare passed, he and his partners bet the health care system was going to change, with more people gaining coverage, and insurers and hospital merging and gaining power to help government manage the new system. It was apparent government could not manage the system alone. Robbins and his partners began to invest in big insurers and big hospital systems and clung to their thesis that they system was going to change big time through two presidential campaigns, congressional shoot-outs, two midterm defeats for Democrats, and two Supreme Court cliffhangers.
Their bet has paid off handsomely. Only three giant insurers remain – United, Anthem-Cigna, and Aetna-Humana. Hospitals are merging into giant chains. Glenview now owns shares in seven huge health insurers and hospital operators with these values of holdings and year-to-date changes in stock price in 2015: Humana $926.7 million +28.6%, Tenet Heathcare, $863.6 +15.2%, Anthem $759.5 million +23.5%, Community Health Systems , $712.3 million +9.2% HCA Holdings, +27.2%, Aetna $395.2 million, +26.1%, and Cigna $274.6 +50.0%.

Legacy lessons? As big government grows bigger, it’s easier for government to manage and control the system through bigger players delivering the health care goods, namely big insurers and big hospitals. Consolidation, in other words, is the ObamaCare legacy endgame.

Two, will the legacy be growth in government coverage and decline in employer coverage? Will coverage of employees under ObamaCare, with its mandates that all workers be covered, all plans have comprehensive “essential” benefits, or suffer onerous penalties, and force employers to drop or shift risks by offering only high deductible health plans? This is not only possible but probable. Since 2005, the percentage change in annual enrollment by coverage type has been;

• Medicaid, + 52.2%, 69.7 million people

• Medicare, + 31.1%, 54.1 million people

• Individual, including Medicare supplemental and health exchange plans, +25.4%, 25.2 million.

• Employer sponsored plans, -3.5%, 172 million

In other words, government sponsored and mandated plans dominate U.S. health care and are the fastest growing health market segment.

Three, will big government break the back of the medical profession by consolidating it and by deemphasizing autonomy and minimizing personal individual patient attention and cutting fee-for-service reimbursement by transforming to a system based on “value,” i.e, managerial and computer-judged population outcomes geared to lower prices as managed by teams using big data and online algorithms paying for by bundled services across the continuum of care?

Four , will the legacy be further fragmentation of the system with government controlled clinics, retail clinics, hospital-owned urgent care centers and other decentralized outpatient facilities, and private physicians in consumer-focused outpatient diagnostic and treatment centers, offering convenience and greater consumer satisfaction and fighting for market share in a two-tier health system, designed for those who can pay or not pay?

Five, or is it possible that ObamaCare will falter and break up in the shoals and on the shores of economic and reality
because of broken ObamaCare promises, out-0f-control costs, loss of patient choice and freedom, public distrust, and political defeats at the presidential and congressional ballot boxes?

Only one thing is certain. The Republicans cannot beat something, ObamaCare, with nothing, complaints and criticism of ObamaCare, without a unified alternative that covers more people at less cost with more choice.

Six, will it be all of the above, implemented in one way or another?
Probably, and maybe that’s the way it ought to be in a multicultural democracy that desires individual choice, quality options, and personal freedom with privacy.

Thursday, July 23, 2015

Physician Pride and Autonomy

That the Accountable Care Act has wounded the pride of doctors and eroded their autonomy there is little doubt. Patients with primary care physicians are flocking to retail clinics staffed by nurse practitioners and physician assistants and to urgent care centers when they have no primary care doctor. Politicians are saying only the government, not physicians, can be trusted to deliver care. Doctors are rushing into hospital employment because they cannot afford to maintain private practices because of low reimbursement and government regulations . Americans are being told that only comparative data generated by computers can be trusted, not clinical judgment and experience, as a basis for paying physicians and judging “value” of services. Doctors are being replaced by nurse practitioners and physician assistants, or teams of other care professionals, to provide “coordinated care across the continuum.”

To make matters worse, there is no unifying national organization representing physicians to respond to these challenges to physician pride and autonomy. The American Medical Association is no longer respected and has declining membership. Organizations like Sermo, the Physicians Foundation, medical societies and academies represent different physician constituencies, and groups like the American Association of Physicians and Surgeons, or the Free Market Medical Association are regarded as too conservative.

The American public is confused. They consistently disapprove of ObamaCare, usually by double digit margins. They want to see a doctor but are having a hard time finding one. More than one-third are now enrolled in Medicare (55 million), Medicaid (70 million), health exchange plans (10 million), and at least one half receive government benefits in one form or another the VA, food stamps, disability payments, Social Security.

It is in this setting that a new physician organization, the United Physicians and Surgeons Association (UPSA), has been formed to address physicians dilemmas. UPSA will meet in Keystone, Colorado, on July 24-26 at a physician summit meeting to consider physician options and how to respond to ObamaCare, which appears to be here to stay, to bundled payments for episodes of care rather than fee-for-service, to declining physician reimbursements and regulations, to online virtual relationships between patients and doctors, to the constraints of hospital employment and its high costs for patients, to walk-in clinics as an option to physician office visits, to how to use new social media and mobile device innovations to improve care and convenience and market their services, to market -based alternatives, such as direct ambulatory primary and surgical care devoid of 3rd party involvement, to and high deductible savings accounts, in which patient mus pay up to the amount of the deductible. In the age of a rapid changing culture in which physicians are considered as just another market commodity, and which are sometimes viewed with irreverence, there is no single magical answer to these various challenges. Thee are only niches to be filled, and alternative consumer-friendly markets to be developed.
Convenient Ambulatory Retail Care

If you have any interest in the powerful expansion of retail ambulatory care, as delivered by nurse practitioners and physician assistants in pharmacy and supermarkets, I invite you to read two articles in the July 23 issue of the New England Journal of Medicine:

“The Expansion of Retail Clinics- Corporate Titans vs.Organized Medicine,” by J.K. Iglehart, national correspondent for the Journal.

“Convenient Ambulatory Care – Promise, Pittfalls, and Policy, “ by three authors from the New York City and Health and Hospitals Corporation.

The articles messages are unmistakable: walk-in clinics in pharmacies and supermarkets, now numbering 1900 and owned by corporations and staffed by nurse practitioners and physician assistants, and walk-in clinics, 6400 of them, staffed by family physician and emergency room physicians, and owned by various health care entities, are growing like topsy.

Together ambulatory care setting visits account of one third of health care spending. Why the rapid growth of wall-in clinics? The reasons are varied, but walk-in clinics appeal to health care consumers. They can expected lower prices, extended hours, to be seen immediately, low-acuity care, immunizations, some preventive care, and insurance coverage, and they do not require a primary care physician to get care.

Here are the main players in the commercial market.

CVS, clinic name – MinuteClinic, 980 clinics

Walgreens, clinic name – Heslthcare Clinic, 400 clinics

Kroger, clinic name – the Little Clinic, 159 clinics

Target, clinic name – Target Clinic, 80 clinics (on June 15, 2015, CVS acquired Target pharmacies and clinics, which will be rebranded as MInuteclinics)

Most of these clinics share information and referrals with primary care physicians. Urgent care centers have relationships with health care organizations such as EpicCare, various proprietary hospital system, eClinicalWorks, or Athenahealth.

Walmart’s is also in the ambulatory game. The huge retail chain has announced it will operate “Walmart Care Clinics,” in conjunction with QuadMed to arrange for community-based physicians to provide clinic oversight. Walmart now runs 17 clinics in Texas, South Carolina, and Georgia.

Overall, CVS with 7600 stores, WalGreens with 8200 stores and Walmart with 4500 stores, have plenty of room for expansion of retail clinics.

A number of medical organizations – the American Medical Association, the American Academy of Family Physicians, and the American Academy of Pediatrics have questioned retail clinics quality of care. The Academy of Pediatrics have been the most strident, saying retail clinics are an “inappropriate source of primary care for children because they fragment children’s health care and do not support the medical home.”

According to J. Hwang and Mehrotra, writing in the Harvard Business Review in 2013, retail clinics, despite their rapid growth, have failed to transform health care because of regulatory and reimbursement barriers. Nevertheless Iglehart observes, “changes in policy under the ACA, a loosening of state restrictions on nurse practitioners’ practice, and the movement toward value-based car won’t erase all the obstacles facing retail clinics, but the train has definitely left the station.” Whether retail clinics will contribute to the ACA “train wreck,” a term coined by Max Baucus, former Democratic senator from Montana and now ambassador to China, or transform health care is for history to judge.
What Experts Predict about Health Care Future

Experts, it is said, are someone from out of town who knows more and more about less and less until they know everything about nothing. Experts cannot predict the future because it involves the future. Keep these truisms in mind as you read these predictions about the future of health care from 10 well-known and respected health care futurists as presented in the July 21 Wall Street Journal, "The Future of Health Care: The Experts."

As I read their predictions, I thought of Edward De Bono, an English physician who runs a think tank for experts on the Island of Malta. De Bono has said the healthcare landscape is composed of a series of vertical holes, which hospitals, academic centers, and specialists inhabit. At the bottom of each vertical hole resides a collection of world class experts. The only problem, observed De Bono, is that the holes are not interconnected.

The present crop of experts are not in holes. They are hovering over the health care landscape. They have new tools - the Internet, social media, and mobile devices – that they believe will allow them to connect the holes, for better or worse.

Here are 10 of their predictions, as set forth in the July 21 edition of the Wall Street Journal “The Future of Health Care: The Experts.

1. John Sotos cardiologist, flight surgeon, and CEO of Expertscape. com. “How Future Hackers Will Target Your DNA.” Expert hackers will design DNA sequences that will spread DNA viruses from person to person that will allow hackers to redesign the human race into species they favor – redheads, whites, blacks, members of the British Royal family. DNA, notes Sotos, is nothing more or less than a programming language for living tissue. The human genome therefor is vulnerable to hackers. Our only defense against social engineering hackers is to build a cadre of experts to defend against them..

2. David Blumenthal, MD, president of the Commonwealth Fund, “What Health Care Will Look Like in 2013. Maybe.” Mobile devices will make health care better, more convenient, and cheaper. Maybe, if certain problems are resolved – preserving the privacy of personal data, making sure various devices and websites can be made to talk to one another, and bridging philosophical gaps between government elites and marketing experts.

3.Marc Agronine, MD, a geriatric psychiatrist in Miami, “The Nursing Care of the Future Will Be in Our Homes.” Home care services of every kind will be possible with wireless wearables and mobile devices that provide data on vital signs, metabolic indices, home safety, and daily needs. Many of these devices will be voice-activated. Most will be under the patient’s control and will monitor, track, and engage patients in innumerable ways even if the patient is computer illiterate and no matter what their mindset or capabilities.

4.Robert Wachter, MD, professor at the department of medicine at the University of California in San Francisco, “How Technology Will Change the Doctor/Patient Relationship,” Telemedicine and technology will transform these relationships at the level of patient stays and visits to hospitals, doctor visits, and emergency rooms, transforming many of these relationships into virtual visits over the net. The problem will be making sense of it all. Treatment will be customized to the fit patient needs based on gene analysis, risk factors, and the real-time monitoring of hundreds of thousands of similar. patients will similar problems.
5.Gur Dhal, MD, professor of medicine at the University of California, “How Technology Won’t Change the Doctor/Patient Relationship.” Twenty years from now, medical practice will focus on 3 tasks: 1) discovery of the unique manifestations of a single patient; 2) searches on the Internet for diagnosis and treatment of these individual characteristics; 3) improvements of a plan for care in spite of the unwieldy nature of our health system. Interactions of doctors and patients will remain pretty much the same but will change the nature of the conversation by narrowing the knowledge gap between doctors and patients.

6. Molly Mettler, Senior of Missions at “ A Personalized Owner’s Manual for Your Health Care,” We will have a totally personal, totally interpretive owner’s manual to access health care patient records and a patient’s personal health care record. It will focus on your health goals, will be lifelong, and individualized to give you access to unlimited information, and to understand your complete health care .

7. Drew Harris, MD, Director of Health Policy at Thomas Jefferson University School of Population Health, “How Big Data Will Customize Your Health Care,” Fear not for the future of your health. Big Data in wearable devices will track where you go, what you eat, what you do, and how we sleep in real time. But we must use this data and control it so as not to impinge on individual liberties and make sure the data system is unhackable. So far the government has proven impotent in warding off hackers. Hackers has stolen data in 21 million government workers.

8. Madly Dychtwald, author and co-founder of Age Wave, “A Vision of the Future Free of Alzheimers,” By 2015 we will be well on the track of preventing and ending Alzheimers, that dread that results in senility of 5 million Americans. We will do this through advances in technology, that reduce or dissolve amyloid plaques that short circuit normal synapses. When Alzheimers no longer exists 1) half of nursing home beds will be emptied 2) tens of millions of caregivers will be unshackled; 3) money now going into Alzheimers research will be freed up to pursue cures for other diseases; 4) Alzheimers patients will be able to lead independent lives; 5) fears of a longer life without dementia will be realized.

9. Leah Binder, President and CEO of the Leapfrog Group. “What Hospital Websites Will Look Like,” High Deductible Health Plans (HDHPs) will transform the health care landscape and radically change health consumer behavior. Patients will shop for care, compare costs, seek out what hospitals have to offer, rate the quality of hospitals, have unlimited access to hospital pricing structures, consider hospital special offers, and rate the food and amenities offered by various hospitals.
10. Susan Devoe, President and CEO of Premier Inc, a health care organization representing 3000 community hospitals, “What Future Hospitals Will Look Like,” Hospitals will consists of an interconnected network of hospitals, doctors, and other providers provided coordinated care across the continuum of care. The network will bring together primary care physicians, specialists, post-acute care facilities, and pharmacy, nutrition, and wellness coaches – all available for managing outcomes and total costs will be lowered by bundling care, each provider or group of providers being paid on a sliding scale based on the effectiveness of the organization in achieving its outcome goals.

So much for utopian predictions, based too much, in my opinion, on the dependence of data, social media, and wearable and implanted devices to be the be-all and end-all and measure-all of future health care. There is no such thing as total transparency, total prevention, or total cures. But one can always hope and have big dreams and big goals. If even half are achieved, it will be worth the effort.

Tuesday, July 21, 2015

Fait Accompli President

President Obama has an effective technique for getting what he wants on controversial issues.

This technique is to hold the draft on the text of the deal or the negotiation being conducted until it is irreversibly done or settled by the time critics know about it.

This was what was done or is being done with ObamaCare, the opening of Cuba, the Trans-Pacific Partnership Agreement, and the Iran Nuclear Deal. These presidential agenda items it is argued, are too important and sensitive for non-Presidential eyes.

The proceedings leading up to their announcement are a closely held secret behind closed doors. Even members of Congress, particularly those on the other side of the issue, can see, or hear, or read what’s going on if they agree not to talk about or leave their pens, phones, recorders, and staffer at the door. We may catch a glimpse at what’s evolving through leaks. but not the details. This approach is justified as executive privilege.

With ObamaCare, Nancy Pelosi, Democratic House Leader famously disclaimed, “We’ll have to passed it to find what’s in it.” The Cuban negotiations took place in secret. The Pacific trade pact, which had 30 chapters, with a draft chapter on intellectual property ran 77 single-spaced pages.

The Iran deal is dealth with by the President and his foreign negotiating team in 159 pages. The Congress has 60 days to read it and approve it. The conventional wisdom is that all Republicans and a handful of Democrats, most with heavy Jewish constituents, will oppose it.

But in the eyes of the President, it is a done deal. Obama is confident that its opponents will not have votes to override his veto if the agreement does not pass Congressional muster.

The Congress has 60 days to read it and approve it. The conventional wisdom is that all Republicans and a handful of Democrats, most with heavy Jewish constituents, will oppose it. In the eyes of the President, it is a done deal. Obama is confident that its opponents will not have votes to override his veto if the agreement does not pass Congressional muster.

As the Wall Street Journal says in its lead editorial today, "Obama's U.N. First Gambit," the President has deployed two masterful touches to make sure the deal was approved. One, "He constructed the negotiation as an executive agreement." rather than a treaty, that would have required a two-thirds vote of approval in the Senate." Two, he rushes the agreement to the United Nation's Security Council for an unanimous agreement before Congress has its its 60 days to consider the agreement. This Presidential gambit is obvious - to shame the Congress before the world if it decides to disapprove the Iran deal.

Saturday, July 18, 2015

ObamaCare Bears

Bears is a term applied to Stock Market pessimists. But now, Bears in the national media are deploying Bears to ObamaCare.

What follows is a sampling of titles of bad news media stories.

“As Medicaid Turns 50, Debate on Expansion Turns Bitter”

One of the seldom told ObamaCare stories is the unprecedented growth of Medicaid under the health exchanges. Enrollment has expanded by 11 million under the exchanges. It now surpasses 70 million and is on track to 100 million by 2020. Many GOP governors are staying they cannot afford this expansion, and some are asking Medicaid patients to pay for part of their care.

“Phony Applicants Approved for Subsidies and Allowed to Re-Enroll in Health Plans.” This is based on a small study of 11 fake patients created to show the potential for fraud in ObamaCare. Since most general government programs over time have about a 10% fraud rate, critics say the study is just the tip of the iceberg.

“Choice of Doctors and Hospitals Limited in Health Plans.”

If you have an ObamaCare-compliant plan, your changes of retaining your current doctor are about 58% and your current hospital about 74%. Otherwise, you’re going to have to shop around to find what doctor and what hospital may accept you. You may be disappointed because 25% of Medical Group Management members say they will not take those in health exchange plans. And you can not find the takers and non-takers until you call.

“IRS Gets Poor Marks for Its Delivered Services under ObamaCare.” ObamaCare has imposed an extrordimnary burden upom an already beleaguered IRS, which is under the gun for its selective denial of conservative group requests. It is also responsible for deciding who qualifies for subsidies. The IRS complains it is short on funds. In any event, it is only responding to 37% of phone calls, and you often have to wait to discover the IRS cannot respond to your request for information. If jr IRS keeps this up, it will become known at the “Infernal Revenue Service.”

“ObamaCare’s Prices Keep Surging.” Many ObamaCare plan insurers, who now have a full year of data, on what health law plans really cost, could see hikes of 30%, 40%, and even 50%, with an average increase of 11.2%. Things will get worse after 2016, federal bailouts through “risk corridors” expire, and when “reinsurance” for the most expensive patients stop. The average individual can expect a yearly spike of yearly premiums from $3.200 to $3,700 with family premiums going from $13.000 to $15.400. By 2023,the average family plan could be 61% more than in 2015. Despite the Supreme Court’s recent King v. Burwell decision upholding ObamaCare, the Affordable Care Act will become more unaffordable for many Americans.
Where Have All the Doctors Gone?

Those enrolled in ObamaCare health exchange plans are having to deal with narrower physician and hospital networks and sometimes loss of their own doctors and favorite hospitals.

ObamaCare health exchange plans 42% fewer oncologists, 42% fewer heart specialists, 32% fewer primary care doctors, and 24% fewer hospitals.

Or, as the Obama administration puts it a more positive light, you can now go to 76% of hospitals and see 68% of primary care physicians 58% of cancer and heart doctors, 68% of mental health specialists.

For those of you who are not rocket scientists, the purpose of this narrowing of choice is to cut health care costs by using lower cost doctors and hospitals. Some critics call this process the race to the bottom and rationing down, but these cynics tend to know the price of everything but the price of nothing.

Where have all the doctors gone for ObamaCare health exchange enrollees.

Some have gone from primary care into higher-paid specialties with shorter hours for a better life style.

Some have gone into hospital, big groups, and urgent care employment for economic security and malpractice coverage.

Some have gone into retirement, part-time work, or other lines of professional activities.

Some have gone into hibernation by not seeing patients on government programs, or seeing fewer of them.

Some have gone into direct primary care or direct specialty or surgical care, to direct care in urgicenters to escape the hassles and shackles of ObamaCare, to avoid buying electronic health record systems and ICD-10 coding, and to spend more time with patients rather than data gathering and record keeping.

Doctors may be gone for some, but they are not forgotten.

Tuesday, July 14, 2015

ObamaCare Octopus

I awoke this morning thinking about how I should organize the 2470 Medinnovation blogs I have written since ObamaCare passed on March 23, 2010.

Chronologically to show how the law has evolved?

Topically do demonstrate how the law effects different groups in different ways at different times?

Philosophically to highlight the different idaological moral and economic points of view?

Metaphorically in an attempt to simplify a multidimensional, convoluted, complicated subject.

If I were to choose the latter, what metaphor would I use? The Octopus would be my choice.

The Octopus is top-down creature who scours the bottom of the sea bed. It has 8 tentacles with suckers which it may use for different purposes. In the case of health reform, the fleshy body of the octopus could represent the power of centralized government, seeking nourishment by bottom feeding.

The tentacles might stand for entangling bureaucracies, compromise of free market principles, adverse effects on individual freedoms, protection of the uninsured, unintended undermining of the economy and the middle class, a profound restructuring of the massive $3 trillion dollar health system.

The octopus metaphor just might work. I have used it in 3 previous blogs.

“The ObamaCare Octopus,” May 4, 2012

“More on the ObamaCare Octopus,” May 21, 2013

“How to Debated the ObamaCare Octopus.” October 3, 2012

In the first of these blogs, I defined Octpus a cephalopod mollush with a soft body, and a large head with an underside ante 8 arms with suckers.

I went on:

“ Obamacare is a wondrous, wily, and wide-reaching creature. It has a large bi-lobed brain. One side of the brain is called Medicare, the other Medicaid. ( to these one can now add ObamaCare and health exchange plans.

It has a large budget, officially $1 trillion, but nearer $1.3 trillion if one includes ancillary health programs such as those for Veterans and others. Collectively it spends 50% of all health care dollars.

It has a large ink-sac – with chambers for black, red, and purple ink. The black chamber is the smallest and is said to represent “savings,” which have yet and may never be seen. The red chamber is huge, and Obamacare continually squirts red ink out of it, to the tune of $1.76 to $2.23 trillion over the next 10 years, depending on which federal agency. the CB0 or OMB, you ask. The purple chamber is the most effusive. It is capable of gushing gobs of purple prose to mask the red ink.

The octopus is highly mobile and continually changeable. It moves fast both at the bottom and top of the ocean know as American society. It has been known to sprout wings, if the political occasion demands. It can assume the hues required to sooth and seduce allies and enemies. It even has a megaphone, called the mainstream media, to broadcast its message, or to hide its intent as it glides along the bottom or occasionally rises to the surface.

Its real power lies in its eight tentacles. These tentacles can vacuum up monies and liberties and suck them up into the central brain, which is crawling with experts, bureaucrats, administrators, and elites of every stripe, all of whom know now to distribute power and redistribute other peoples’ money.


· One tentacle reaches into the pocket of taxpayers, from which it will extract at least $500 billion to pay for new entitlements.

· A second tentacle sucks $575 billion out of Medicare, through such “savings” incurred by dismantling Medicare Advantage and herding patients, doctors and hospitals in Accountable Care Organizations.

· A third tentacle feeds its expanding brain and soft body by tamping down Medicare physician incomes and hospital revenues to below those of Medicaid by 2019.

· A fourth tentacle presses down on State Medicaid budgets, adding 32 million initially and 46 million more by 2020 while suctioning money out of State budgets for education, transportation, and other social services.

· A fifth tentacle is placed down upon patients, who will be losing their existing health plans and doctors, because of federal rules, regulations, and costs.

· A sixth tentacle draw upon large and small employers who will be required to offer coverage, accept high cost government programs, or pay financial penalties.

· A seventh tentacle will be applied to healthy young families and adults, who are already seeing costs rise and benefits shrink, and who object to having to pay for comprehensive plans they feel they do not need.

· An eight tentacle is Obamacare’s operating system and underlying values which are fundamentally at odds with the principles of limited government under the U.S. Constitution.

The Millenial Physician

In his July 13 Q&A session with Kristen Anderson, a young pollster for Republicans, Brian Lamb, who has been conducting Q &A on C-Span for 11 years, asked what and why millenials, aged 18 to 34, think the way they do and vote they way they do.

In her book, The Selfie-Voter: Where the Millenials Are Leading America (and How Republicans Can Keep Up (2015), Kristen explained many millenials think Republicans are too conservative and fixed in their ways. She added the millenials don’t want to repeat the mistakes of their parents who put too much trust in the establishment, be they in government or businesses.

Partly because of their high rate of unemployment and difficulty in finding well-paying jobs and their tech savvy, they tend to trust only with another and their social media connections with friends on the Internet. The social media and websites are where they get their news. The millennial vote, she believes, is up for grabs, but only if the Republicans concentrate their voting recruitment efforts online in the social media.

The Lamb interview got me to thinking how millennial physicians must feel. Most physicians finish their formal medical training by age 34, and they must share the beliefs of their compatriots. These young physicians often receive 100 or more job offers, mostly from hospital systems. About one half are women, and many are married to each other. They have an average educational debt of $150,000, and most are not interested in private practice. They are interested in paying off their debts and having a balanced life style. But they are diverse lot. Most are tech savvy, and most believe in the power and speed of the Internet to get news and gather medical information, and to evaluate , empower and interact with patients. They are passionate about innovation.

They are skeptical of ObamaCare for other millenials, but since for most, health benefits along with time off and malpractice coverage come with employment, they may not spend much time fretting about the health law.

If they are like other millenials, they probably covet open collaboration with their peers and patients, are culturally liberal in matters of sexual orientation, gay marriage, and ethnicity, and are open to the speed and convenience of the Internet in communicating with patients. They are diverse lot. It has not escaped their attention that the new rich are often online entrepreneurs aged 20 to 40, and they believe developing and applying new apps as the key to transforming medicine . Some are virtual physicians in Skype interviews with patients, some are engaged in home care and telemedicine outreach programs, some are engaged in using smart phones to monitor patients with wearable or implanted devices, others are developing algorithms for diagnostic, prognostic, and therapeutic use.

Monday, July 13, 2015

Questionnaire – Future of Health Care Trends

Pick one or more in order of preference or check all of the above.

Continued expansion of health exchanges, Medicaid, Medicare, and other federal programs.

More determined efforts by opponents of big government and control of health care with replacement or repeal.

More telemedicine with virtual visits to doctors via Skype with rapid diagnosis not requiring direct doctor physical presence.

Dramatic growth of nurse practitioner-run retail outlets in stores like CVS, Walmarts, and Walgreens.

More patient ordered laboratory tests performed on a drop of blood for $1o or less.

Greater consolidation of big insurers and big integrated hospital-based integrated systems, many of the latter with their own insurance arms to capture market share and share of federal dollars.

Shrinking of number of hospital beds with expansion of hospitals into outpatient markets with diagnostic and treatment centers, urgicenters, and free-standing emergency rooms.

More emphasis on personalized, individualized, precision medicine to treat patients, to anticipate what works in patients with certain genomes, and to ward off future diseases.

More use of consumer-empowering I phones and wearable or inserted devices to monitor vital signs and effects of implanted devices.

More patients using symptom-checking to self-diagnosis and to direct themselves to relevant physician.

As costs rise, more emphasis on prevention and wellness with rewards for good health.

More talk about the use of “Big Data” to rationalize care, reduce costs, and improve outcomes.

More direct cash only, retainer-requiring, concierge, primary and specialty medicine as deductibles, premiums, and out-of-pocket costs rise to unaffordable levels.
A Nation of Tolerance and Fairness

We are a nation of tolerance and fairness.

We have twice elected a black president. Black bereaved citizens of 9 blacks shot dead in a Charleston church forgave a crazed white racist. Charlestonians, in turn, took down the confederate flag from the state grounds and placed it in a museum. Before that, these same good folk of South Carolina, black and white, elected a black senator.

We are a tolerant nation. Some of us have tolerated being called bigots because we question the policies of our president. We have tolerated this dreadful practice of political correctness, that pejorative term deployed to criticize language, actions, or policies seen as being excessively calculated to not offend or disadvantage any particular group of people in society. We have tolerated attacks on our nation as a nation replete with money-grubbing groups of white supremicists, as unfair havens of privileged white people. We have tolerated being labeled an unfair nation with unequal opportunities, unequal incomes, and unequal results for every gender and every race.

But there are limits to our tolerance and our sense of fairness. These limits have been shown in our two most recent midterm elections, in the rise of the Tea Party and the number of conservative candidates for the presidency.

Fox News, sometimes unfairly and hypocritically but consistently, has capitalized on these limits with its slogan of “fair and balanced.” Fox is right. we need more balance. As a nation, we have indeed been seeking balance – between ethnic groups, the executive and legislative branches, gays and straights, men and women, domestic and foreign affairs, believers and nonbelievers in our national role and destiny, between fairness and unfairness.

President Obama has staked out “fairness” as his operative governing philosophy. All he wants , he says, is for us to be fair, to offer everyone a fair and square deal, to correct the unfairness that has been meted out to minorities, to modify the sins of capitalism with protectionist big government policies.

These are noble goals, but they have a downside, as articulated by Stephen Moore in his 2011 book Who Is the Fairest of Them All: Opportunity, Taxes, and Wealth in America.

“ President Obama has declared that the standard by which all policies and policy outcomes are judged is fairness. He declared in 2011 that ‘we've sought to ensure that every citizen can count on some basic measure of security. We do this because we recognize that no matter how responsibly we live our lives, any one of us, at any moment, might face hard times, might face bad luck, might face a crippling illness or a layoff.’ And that, he says, is why we have a social safety net. He says that returning to a standard of fairness where anyone can get ahead through hard work is the "issue of our time." And perhaps it is.”

But what is “fairness”? Fair to whom? And in the field of health care, to what group of people – patients and members of the physician and hospital communities who must supply that care/ To paraphrase Moore’s title Who Is the Fairest of Them All: Opportunity, Taxes, and Health in America. Who is the fairest of them all, a paternalistic controlling g big government or an unfettered free market capitalism?

These questions bring up other questions the answers of which depend on you whether you benefit or are harmed by health place polices,

Was it fair for Democrats to pass ObamaCare using a questionable parliamentary maneuver called reconciliation without consulting Republicans and without a single GOP vote?

If it fair that under ObamaCare 20 million uninsured patients or patients on Medicaid ( 6.25% of U.S. population received subsidies? Yes, if you’re among the subsidized. Maybe not, if you’re one of the 93.75% doing the taxpayers' subsidizing.

Is it fair that all Americans must have a health plan, whether they want one or not, or pay a mandated financial penalty?

Is it fair that small businesses, the fountain head of American prosperity, with over 50 workers must cover those workers or a pay $2000 penalty for each new worker?

Is it fair that most of us with incomes 4 times or more above the poverty line must now pay premiums of 20% to 40% more to support ObamaCare subsidies?

Is it fair for the young and healthy to cross-subsidize older and sicker patients?

Is it fair that everybody must pay for health plans containing comprehensive benefits even when they do not need these benefits? An example would be single males who have no children and who will never become pregnant.

Is it fair to when the expense and time spent complying with federal regulations (e.g. installing EMRs and using ICD-10 codes) drive physicians out of private practice into integrated health organizations who may charge twice as much for physician services?

Is it fair for the government to cap the profits of health plans, to say they can devote only 20% to marketing, and prohibit them from taking high risk patients, the main source of their financial losses?

Is it fair for taxpayers to bail out insurers for these losses?

Is it fair that ObamaCare policies promote the massive consolidation of health insurance companies and hospital-physician organizations, effectively ending free market competition?

Is it fair for that one-third of all the uninsured remain uninsured because they resent federal intrusion to their choices, of being forced to pay penalties if they do not have a plan?

Is it fair for governments to fix Medicare rates for procedures such as hip/knee replacements for hospitals, physicians, and rehab facilities when these entities may operate in radically different economic environments?

Is it fair for government to dictate what if any plans we buy, what doctors and hospitals we choose, what medicines and treatments we want, and how we lead our lives no mater how these things affect our individual freedoms, or does Big Brother know best.

Saturday, July 11, 2015

Medicare Proposes Fixed Rates for Hip-Knee Replacements

New hip and knee fixed rates are Okay.

ObamaCare, after all, is here to stay.


Medicare plans to set fixed rates for hip and know replacements in 75 regions of the country. These rates for inpatient surgeries now vary from $16,000 to $32,000, with even more variable rates for rehabilitation care. In 2013, 400,000 hip and knee replacement ran a tab of more than $7 billion.

Fixed rates for hips and knees, federal logic goes would save the government $150 million over the 5 years from 2015 to 2020. The logic assumes all patients are the same, have the same causes of their joint ailments, are treated by doctors with same skills, and have the same outcomes and recovery periods. Therefore, rates ought to be same, regardless of the economic environment in which joints are replaced.

This fixation on fixed rates reflects the Obama adminisitration’s belief in the homogeneity of people and medical results and social equity- the same pay, same benefits, and same outcomes.

Providers who perform well, which I assume means more bang for the buck more “value” in modern jargon, will be rewarded with bonuses. Those who perform badly, costs beyond fixed rates, will be required to repay government part of the costs.

This federal fixation on fixing rates for hips and knees reminds me of George Orwell’s warning about totalitarian regimes in Animal Farm, “ All animals are equal, but some are more equal than others.” In this case, autocratic bureaucrats and more equal than autonomous providers. When the government owns the payment system, you have to follow the Piper.

I am not saving my breath worrying about the $150 million savings by 2020. The government is notorious for cost overruns. In 1965, it was said Medicare and Medicaid would not exceed $9 billion by 1990. In 2015, CMS costs will top $1 trillion. Government costs projectors lack 2020 vision. Besides by 2020, ObamaCare may be history
Government Leverage V. Physician Leverage

As Archimedes said, “Give me a place to stand, and I will move the earth.”

Well, we know where the government stands, on ObamaCare. For 5 years, Obama has been saying will lower costs, allow you to keep your doctor and health plan, and improve the quality of care. The problem is ObamaCare has achieved none of these lofty goals, not yet anyway. Accountable Care Organizations, ObamaCare’s favorite tool for lowering costs, has largely failed to save money for government. The lever is moving left, towards more Medicaid programs, but it is also moving right, towards more market-based solutions.

That vexing question remains: Is Government the solution or the problem?

So far, the public is unconvinced government is the solution. Today’s Real Clear Politics average of national polls indicates 7.3% more Americans disapprove than approve of the health law.

But, as president, Obama has leverage. He has the law in hand, he has the Supreme Court on his side, he has the bully pulpit , he has roughly 40% of Americans dependent on Medicare and Medicaid, and he has the national media on his side, which the public believes is “ biased “ towards the progressive agenda.

And, as Cervantes observed in Don Quixote, “ A bird in the hand is worth two in the bush.” In the present political situation, the bird in hand is a law that has passed and affirmed by the Supreme Court, and two in the bush is GOP opposition and the upcoming 2016 elections, which could be captured by a Bush in the bush.

To these birds, I might add a another bird – growing physician opposition to regulations and expenses and difficulties of remaining in small private practice. Sixty percent of doctors remain in small private practices. But their numbers are dwindling, as they retire early, join larger groups, or become employees for hospitals. Despite increasing pressures to become ACA serfs, physicians have a leverage - increasing numbers are not accepting Medicare, Medicaid, or health exchange patients., and more are entering direct cash practices.

No one knows the physician rate of non-acceptance or delays in seeing patients in federal programs, but it is believed to be about 40% to 50% for Medicaid, 5% to 10% for Medicare, and 25% for health exchange patients. Part of the gap of physician resistance is being filled by increased efficiency through use of nurse practitioners and physician assistants, but many patients and physicians still prefer to interact directly

Direct cash practices, which have lower costs than government or private 3rd party affiliated practices and far less overhead, have become more attractive to the public as health exchange and private insurers and employers have turned to high deductible plans, which require out-of-pocket expenditures up to the level of the deductible.

What does it all mean? Probably a 2 tier system, with half the population dependent on government programs and half the people and physicians turning to market-based care.

Thursday, July 9, 2015

3 Impending Physician Fee Changes: Bundled Bills, ICD-10 Codes, or Cash-Only

The goal of CMS, ObamaCare’s payment vehicle, is to have half of physician fees in some form other than fee-for-service by 2018. The rationale is that when physicians charge for their individual services they perform more tests and procedures to bolster their income. By veering away from fee-for-service, the government hopes to save money while moving Medicare and private payers from paying a fee for each service – which encourages doctors to order unnecessary or even harmful tests and procedures. So the federal logic goes.

There are 3 basic options to achieve these savings.

One, by bundling bills. “ Medicare,” according to Ezekial Emanuel , Obama’s former chief medical advisor and a co-author, “should lump together physician services, hospital costs, tests , medical devices, drugs and rehabilitation services related to common ailments – such as broken hips, heart stents and cancer treatments – into a bundle. It would then pay a medical provider a discounted amount for the whole array of services.” The power of this idea, say the authors, is “scale.” This means Medicare could pay for these bundles all at once for every Medicare patient in every section of the country. The key word here is “discount.” In his article, Emanuel note a related ObamaCare strategy, Accountable Care Organizations, is “less than encouraging,” a way of saying that if one cost-saving strategy based on hospital and physician discounts fails, try another, controlled and centralized in Washington.

Two, a second thing going on is the conversion from an ICD-coding system to an ICD-10 which is to take place on October1, 2015. ICD-10 has been in the works for more than 20 years or so. It is widely used in other countries. Mandated use of the clinical U.S. version of ICD-10 is coming, on October 1 2015, CMS will mandate its use on that date, whether practices are ready or not, and whether it drives physicians or small independent practices into retirement or into the arms of larger practices or hospital employment or not.

The conversion from ICD-9 to ICD-10 has been delayed twice, but is now inevitable. The idea is to expand the number of codes from 14,000 in ICD-9 to 68,000 in ICD-10. In this conversion process, government agencies and private insurers could be much more specific about what they are being charged for. Many doctors are hopping mad over this conversion. It compels them to spend more time in collecting data, in installing systems to capture that data, in hiring extra personnel to assure the accuracy of the codes, and making them vulnerable to audits if mistakes are made. A July 1, 2015 interview with W. Jeff Terry MD, former president of the Alabama Medical Association and now an AMA delegate illustrates the height of physician anger. Terry says, “To think we can implement his huge undertaking all in one day is ridiculous.” He maintains it is also “ridiculous,” his favorite word, because of the expense of installing an EMR ($40,000 per physician) and the fact that coding has nothing to do with caring for the patient. Doctoring not documentation is what medicine should be all about. CMS has tried to soften the impact of ICD-coding by saying there will be no ICD-10 audits for a year. Other observers are telling doctors, stop complaining and begin training for ICD-10. Still others are developing software to make conversion simply by translating ICD-9 to ICD-10 codes.

Three, a final option for independent practitioners outside of the hospital setting is drop coding altogether and to convert of a cash-only, direct care practice. Somewhere between 5% to 15% of primary care practices, have shown an interest in doing this. But it is not easy for CMS prohibits these physicians from participating in Medicare and Medicaid programs. Still, physicians have converted to direct care claim their overhead is cut in half, and they can now spend time with patients rather than gathering data for the government and insurers.

Wednesday, July 8, 2015

Fair and Unbalanced: Is Obama’s “Fairness” a Euphemism for “Socialism”?

Greece is about to slide into social oblivion . This is a national and inevitable consequence of socialism anywhere it has been tried.

Stephen Moore, “As Greece Collapses, Socialism Is the Big Loser,” Fox News, July 7, 2015

Striking a balance between capitalism and socialism has always been and will continue to be every nation’s dilemma.

Socialism with lavish cradle to grave benefits is not possible without capitalism and economic growth. Winston Churchill captured the dilemma perfectly, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”

The Greek tragi-drama, or perhaps I should say tragi-drachma, illustrates the problem. Greece, with its obese welfare state, leaky pension systems, and declining tax collections, is bankrupt. Its average retirement age is 60, 1 of 4 adults in unemployed, 1 of 2 of its young people is unemployed, and its national debt is $350 billion , or $31,820 for every Greek man, woman, and child.

Will the U.S. follow Greece? Given our resources, the size of our capitalistic economy, our innate innovativeness, our center-right political culture, and our sense of “fairness,” that is unlikely. In the U.S., 9 of 10 adults is employed, albeit many of them work part-time; 7 or 8 of millenials have jobs, and the national debt is $18 trillion, which works out at over $56,000 for each citizen.

Interpreting fairness lies in the mind of the beholder. In ObamaSpeak, “fairness” is a “Yes-Yes”, and “socialism” is a “No-No”. Obama insists he is not an progressive ideologue, but an even-minded fairness moderate.

Under his health care philosophy, it is “fair” to raise taxes and premiums and deductibles on the middleclass to support lower income classes, to assure equal health outcomes with one-size-fits-all health plans, to eliminate the risks of paying for health care for businesses and health plans by imposing individual and employer mandates and by accepting all health insurance candidates, without regard for pre-existing health or condition or gender.

It’s great if you’re one of the 9.2 million on health exchange subsidies, or the 70 million on Medicaid, or the 55 million on Medicare. It’s not so great if you’re one of the rest of us, depending or market growth to support the government.

Capitalism, Obama seems to be saying or is perceived to be saying, is “unfair.” It produces unequal results. Some make more money than others, or receive more of society's benefits. It rewards the successful. It creates undeserved opportunities for innovators and entrepreneurs. It makes some people fabulously wealthy. It rewards risk. It makes people work for their rewards. And it punishes those who are poor, uneducated, or those who are regarded as minorities.

On the other side of the philosophical divide are people like Stephen Moore, a 55 year old economist who was on the Wall Street Journal editorial board until 2004 and then became president of the Heritage Foundation. Moore is an advocate of economic growth as the fairest philosophy as articulated in his 2011 book Who Is The Fairest of Them All: Opportunity, Taxes, and Wealth in America.

Here is Moore’s rebuttal of Obama in the opening argument in his book.

“President Obama has declared that the standard by which all policies and policy outcomes are judged is fairness. He declared in 2011 that "we've sought to ensure that every citizen can count on some basic measure of security. We do this because we recognize that no matter how responsibly we live our lives, any one of us, at any moment, might face hard times, might face bad luck, might face a crippling illness or a layoff." And that, he says, is why we have a social safety net. He says that returning to a standard of fairness where anyone can get ahead through hard work is the "issue of our time." And perhaps it is.”

“This book explores what it means for our economic system and our economic results to be "fair." Does it mean that everyone has a fair shot? Does it mean that everyone gets the same amount? Does it mean the government can assert the authority to forcibly take from the successful and give to the poor? Is government supposed to be Robin Hood determining who gets what? Or should the market decide that? The surprising answer: nations with free market systems that allow people to get ahead based on their own merit and achievement are the fairest of them all.”

Monday, July 6, 2015

ObamaCare Ineffective in Controlling Premiums

The Obama administration is fond of saying the health law has lowered projected government health costs by as much as 20%. Furthermore, the health law requires that insurance companies must justify rate increases of 10% or more.

The administration should tell this to insurers, who are asking for premium increases averaging 20% to 40% for 2016, and who can justify their rate increases. And they should inform consumers,k who must pay for these higher preimiums.

Premium increases come after the first full year with the new insurance exchanges and federal standards requiring insurers to accept all comers, without charging higher prices because of illness or disability. Many insurers claim premium payments routinely exceeded more than 100% of premium income.

Blue Cross and Blue Shield plars are seeking rate rate increases of 23% in Illinois, 25% in North Carolina, 31% in Oklahoma, 36% in Tennessee, and 54% in Minnesota. Moda Health in Oregon, that state’s largest insurer, received a 25% hike, and the second largest plan, LifeWise 22%. Scott White Health Plan in Texas is asking for a 32% increase, and the widely admired Geisinger Health Plan in Pennsylvania, often praised as national leader in coordinated care, has requested a 40% increase for its HMO.

These increases have raised the question about the effectiveness of the law. Consumers are proving reluctant to switch plans, when they have no guarantee they can keep their doctors. And 45% of the healthy young in the 18 -34 millenial generation say they are more willing to pay the penalty for remaining uninsured rather than select a high deductible ObamaCare approved plan.

President Obama likes to boast the health law has caused 16 -17 million to become insured, but he fails to mention that 33 million remain uninsured . It may be that this administration will challenge increased premiums of 10% or more, but it far from certain how many of these increases will be decreased after review.

Friday, July 3, 2015

Why Is ObamaCare So Confusing and Complicated?

Talk to anyone, and they will tell you never have they found anything so confusing and complicated as ObamaCare. Why is this?

The simple reason is that the ACA is federal bureaucracy run amuck.

A second reason is administrative incompetence with the proliferation of agencies, programs, forms, and rules and regulations .

A third reason is that government must account for every penny and satisfy multiple constituencies. As Jonathon Oberlander, a health care analyst at the University of North Carolina, explained in the December 9 New England Journal of Medicine , “The law is not a single program, It is a collection of mandates, public insurance expansions, and regulations that affect difference groups of Americans in different ways, at different times.” It means different things to different people.

A fourth reason is that it keeps changing to adjust to its flaws and to evolving political realities. Since the law was enacted, it has undergone 54 changes.

Here is a list of changes compiled and explained by Grace Marie Turner in a July 1 article in Forbes Magazine

“By our count at the Galen Institute, more than 54 significant changes have been made to the Patient Protection and Affordable Care Act since it was enacted in 2010 – at least 34 that the Obama administration has made unilaterally, 17 that Congress has passed and the president has signed, and three by the Supreme Court.

Our latest count has added two more changes made by the Obama administration contrary to statutory language, and one rewrite of the law’s text from the latest U.S. Supreme Court decision. Our latest additions:

Extension of credits to people receiving employer-sponsored coverage. Section 1511 of the ACA instructs the Labor Department to issue regulations requiring businesses with more than 200 employees to automatically enroll their employees in any health benefits plan offered by the employer. Section 36B correspondingly denies credits to employees covered by an employer plan. IRS regulations contradict the statutory language and allow credits to taxpayers when they are automatically enrolled in employer minimum essential coverage. Treasury implicitly acknowledges there is no statutory authority for its regulatory change. (May 23, 2012)

Illegal use of exchange grants. CMS issued guidance saying that states operating their own exchanges can use money from federal grants to do outreach and education to increase enrollment, even though the ACA stipulates the grants are to be used only to set up exchanges. (June 8, 2015)

The law doesn’t mean what it says: In King v. Burwell, the U.S. Supreme Court overruled the plain meaning of the ACA to limit tax credits to people living in states that created their own exchanges and instead allowed tax credits for insurance purchased through federally-facilitated exchanges as well. (June 25, 2015)

The court:

Allowing tax credits through federal exchanges: The latest change to the law was made by the U.S. Supreme Court on June 25, 2015, in King v. Burwell when it ruled that the law doesn’t mean what it says. The court ruled 5-4 that the spirit of the law’s goal to expand coverage, not the actual language, allows tax credits to flow through federal exchanges, despite seven instances in the law only allowing credits to citizens in states that set up their own exchanges.

This is the third change to the law made by the court. Three years ago, the Court determined that the law doesn’t mean what it says in calling the penalty for not purchasing health insurance a “tax” and deciding that Medicaid expansion could be optional for the states, in contradiction of the explicit language of the statute.

The administration:

Illegal use of grant money: The Center for Medicare and Medicaid Services issued guidance June 8, 2015, that allows states with their own health insurance exchanges to use money from federal grants for marketing and outreach.

The statute stipulates that the grants must be used to establish the exchanges. The CMS guidance expands allowable use of the establishment grants after January 1 to include “outreach and education, including in-person assistance, to support increasing total enrollment” to levels needed “for the viability of the marketplace.”

Double trouble for employers: The latest research about implementation of the Affordable Care Act by Andy S. Grewal, an associate professor at the University of Iowa College of Law, finds that Obama administration regulations are allowing taxpayer subsidized health insurance for some people receiving employer-sponsored coverage, in violation of the statute.

He described the regulatory changes he has uncovered while comparing regulations to the statute in testimony before the Senate Judiciary Subcommittee on Oversight on June 4, 2015.

Grewal explained that the ACA provides tax credits to U.S. citizens with incomes between 100 and 400% of the Federal Poverty Level (FPL). However, IRS regulations were written to extend credits to citizens below 100% FPL in some cases.

Also, Section 36B of the ACA grants credits to some non-citizens with low-incomes only if they are themselves lawfully present in the U.S. and cannot obtain Medicaid coverage. IRS regulations, however, contradict the statute and allow subsidies if “the taxpayer or a member of the taxpayer’s family is lawfully present in the United States,” and “the lawfully present taxpayer or family member is not eligible for the Medicaid program.”

In the latest addition to our list, he finds the IRS regulations allow persons to obtain premium tax credits when they are automatically enrolled in an employer plan, again in violation of the language of the Affordable Care Act.

Section 1511 of the ACA instructs the Labor Department to issue regulations requiring businesses with more than 200 employees to automatically enroll their employees in any health benefits plan offered by the employer. Section 36B correspondingly denies credits to employees covered by an employer plan.

IRS regulations contradict the statutory language and allow credits to taxpayers when they are automatically enrolled in employer minimum essential coverage. Treasury implicitly acknowledges there is no statutory authority for its regulatory change.

“It’s hard to get worked up over extending tax credits to our nation’s poorest, but the unfortunate structure of the ACA may lead to controversy,” he writes. “Under Section 4980H(a), a business can face severe penalties if it fails to offer health insurance coverage and even one of its employees receives a premium tax credit. Thus, the invalid extension of the tax credit, even when made to a sympathetic individual, can trigger adverse consequences.”

He highlights “the pitfalls associated with Treasury’s failure to recognize limits on its administrative authority.” The Supreme Court’s ruling in King v. Burwell embolden the administration to continue its illegal rampage.

The Galen Institute has been cataloguing the major changes made to the ACA. Prof. Grewal’s newly-uncovered finding and the latest Supreme Court decision bring our count to 54, including the 34th change made by the administration without statutory authority

Thursday, July 2, 2015

ACA at 5 Years: Standoff

An assessment of the ACA at 5 years would not be complete without acknowledging the effects of the law on the relationship between the American people and their government and the balance of power within our society.

David Blumenthal, MD, et al, “The Affordable Care Act at 5 years,” New England Journal of Medicine, June 18, 2015

As the July 4 Independence Day celebration approaches, it is time to admit the Patient Protection and Affordability Act (ACA) is a standoff between progressive and conservative elements in American society. For some, the ACA protects and makes care more affordable. For many, the opposite holds true.

Progressives can lay claim to successes: passage of the ACA, protection for those with pre-existing illnesses , insurance coverage of 16-17 million of the previously insured 2012 reelection of the President, and survival of two Supreme Court challenges.

Conservatives can point to the continuing unpopularity of the ACA, increased premiums and deductibles of many in the middle class, limiting of choice and individual freedoms, mandated financial penalties on individuals and businesses with slowing of the economy, and intrusions on the prerogatives of the states.

The result has been a standoff – the refusal of progressives to budge on the moral issue of greater coverage for all, and the insistence of conservatives that the ACA is anti-capitalistic and anti-choice. For the rest of President Obama’s term the ACA is “here to stay,” and after 2016, if Republicans win, the ACA may well be repealed or replaced by a market-based plan.

In the interim,

progressive strategies for reform – reducing Medicare hospital –acquired conditions and readmissions, paying for value for hospitals and physicians, bundling payments , ending or minimizing fee-for-service, and promoting accountable care organizations and transforming primary care into a team-based enterprise will be at play.

On the conservative side, Republicans will chip away at ACA funding, seek to end taxes on medical innovation companies. repeal the Independent Payment Advisory Board, and change the rules of the Employer Mandate by extending the period at which penalties for coverage kink in from 30 to 40 hours.

During this period, those enrolling in health exchanges and Medicare will increase, many millenials will prefer to pay penalties to not having a health plan, nearly half of the remaining 33 million uninsured will pay cash or barter for care, physician shortages (now 28,000 at the VA) will mount, more physicians will turn away those on Medicaid, Medicare, and health exchange plans, and ObamaCare-inspired high deductible plans will drive a consumer revolution towards direct cash, negotiated, competitive care.

The standoff will continue, at least after the 2016 elections and for indeterminate time thereafter. What may evolve is a two tier system, one paid, delivered, and run by government run, and the other in the private sector.
ObamaCare: Cost to Taxpayers of Health Exchange Subsidies

Now that the Supreme Court has ruled that 6.7 million people will continue to receive federal health exchange subsidies, it’s time for a little math.

These 6.7 million people receive $362 a month in subsidies.

Multiple $362 by 12, and that comes to $4344 per year.

Multiply $4344 by 6.7 million and you get $29 billion per year.

Add 2.5 million subsidized people now on state health exchange subsidies to the 6.7 million, and you arrive at the figure of 9.2 million now on federal and state subsidies.

Multiple 9.2 million by $4344, and it comes to $40 billion.

Take into account, that ½ of America’s 320 million citizens pay no income taxes, and that leaves 160 million taxpayers paying the $ 40 billion.

Divide $40 billion by 160 million, and you get $2500 per taxpayer per year.

President Obama has 18 months to go in his term. Multiple $2500 by 1 ½ (18 month/12 months) and that amounts to $3750 per taxpayer per subsidized patient on federal and state exchanges for the rest of his 2nd term.