Relevant and even prescient commentary on news, politics and the economy.

Michael Halasy to write for Angry Bear

Michael has written for Angry Bear in the past (see two of many Prometheus and Bundled Payments and Medical Tourism, separating facts from fiction).  He is

a practicing PA in Emergency Medicine. My undergraduate education started with economics. I function as a health policy analyst for a couple of national organizations and as a health services researcher, working in a collaborative role on OR/SE projects and workforce/value studies as well.

Michael will be writing on healthcare, health insurance, US healthcare system economics and issues of policy.

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Congressman Ryan’s Health Care Booby Trap

by Michael Halasy

Congressman Ryan’s Health Care Booby Trap

Much has been said about “repeal and replace” it has become almost as much a part of GOP lexicon as “drill baby, drill”. The GOP despite having been supportive of the framework for the ACA previously, wants badly to discredit the administration and claim a victory in the name of “freedom”. Too bad history shows that the Heritage Foundation and VP Stuart Butler supported a plan almost virtually identical to the ACA.

Now, along comes Congressman Ryan, despite being rebuffed last year for the “Roadmap”, he has come along with a v 2.0. Unfortunately, he is making headway. I won’t comment on the other aspects of the new and improved Roadmap, but it seems to be just as much of a disaster as the previous one. The House has already passed it of course, and Romney, aka etch a sketch, has enthusiastically received the Congressman’s endorsement and has endorsed Ryan’s plan as well.

So we know that the GOP, primarily the Tea Partier’s, despise the individual mandate as a violation of their freedom. Ezra Klein had a great article last week about the hidden mandate in the Ryan bill , but does not discuss the fact that it will essentially eliminate employer based insurance. Now, Ryan’s plan assumes that the state based exchanges (sound familiar?) will produce a lot of savings, and he assumes that market forces will do even more. To that end, he offers a couple of tax credits. But, oh by the way, you LOSE employer based coverage under Ryan. It severs it completely. So an individual gets a 2,300 dollar tax credit (family is 5,700) to buy insurance. I can tell you now, that the average per the Kaiser Family Foundation for a single individual is much higher than 2,300.

Family plan premiums are $15,073 on average, while coverage for single employees is about $5,429.

Workers contributed an average of $921 toward the premium of single coverage and $4,129 for family plans.

What this means, is, that under the Ryan plan, your single insurance premium will cost you 2,208 MORE per year out of your own pocket at current cost. Family plans will cost you 5,244 MORE per year out of your own pocket.

That’s the repeal and replace plan folks…..That’s what the House voted on and passed…..That’s what Romney endorsed….THAT’s the GOP plan…

It’ll save businesses money, and it’s great for corporate America. However, it is not so great for the average small family living on 40-45k per year combined income.

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"The Treadmill and the Poor Law are in full vigour, then?”

by run 75441

The Treadmill and the Poor Law are in full vigour, then?” A Christmas Carol, Charles Dickens

That’s Baloney” stated Rep. Micky Hammon, R-Decatur, Alabama; the immigration bill cosponsor, told the Huntsville Times.

It’s clear the study over estimates the negative and under estimates the positive to skew the result toward an agenda,” Hammon said. “If 40,000 illegal workers leave the state, they free up jobs that homegrown Alabamians are happy to have.”
 The Cost of Alabama Immigration Law (H.B. 56) Disputed.

Alabama has the lowest unemployment rate among seven southeastern states,” the spokeswoman for Governor Robert Bentley said.

I recently completed a quip to Senator Levin of Michigan who was commenting on the fall of the unemployment rate in Michigan and his plan to jump on the deficit reduction bandwagon at the same time. I thought by now most states and the relative “pols” would know a drop in U3 state wide or nationally does not necessarily mean an increase in employment. If the Civilian Labor Force drops in numbers because people give up looking for work, than it is possible for U3 to decrease. This is precisely what has happened in Alabama.

People are dropping off unemployment rolls because they’ve become discouraged by not being able to find a job and have stopped looking, according to an analysis by Arise Citizens’ Policy Project. Alabama’s labor force shrank by more than 6,000 workers in October, and the labor force has been shrinking since June. Economists say a shrinking labor force makes it easier for a state to post an unemployment rate decline, even if job growth is small.” …Analysis shows a steep drop in the state’s unemployment rate isn’t because of Alabama’s overreaching immigration law”
Birmingham News


It appears kicking the illegal immigrants out of Alabama doesn’t do much for getting people back to work. Maybe those UAW jobs which did not require more than a high school education and a good work ethic were not as bad as some Senators made them out to be?

“Are there no prisons? Are there no workhouses?” A Christmas Carol, Charles Dickens

It appears those students who went to Law School, shelled out $100,000 or more to get the exclusive Juris Doctorate, and as a result expected to make the big bucks. They were sadly disappointed when they could not find a job even with the best of credentials. So what does a newly minted attorney to do? Of course, sue the School of Law which they attended for false advertising.

“Adam Bevelacqua graduated from Brooklyn Law School last year with $100,000 in debt but high hopes for his future. He passed the bar on his first try in New York and had internships to highlight on his resume. And, according to his research, the school’s job placement rate for new graduates was between 90 to 95 percent. But Bevelacqua, 29, is no longer as optimistic.

“I’ve been looking for work ever since,” Bevelacqua told msnbc.com. “The jobs aren’t really there.”
On Wednesday, Bevelacqua joined 50 other law school graduates from across the country who sued their alma maters, alleging they were misled about job prospects and burdened with huge amounts of student debt.”
MSNCB News Law schools face lawsuits over job-placement claims

The state of Alabama and Jefferson County are in need of good and cheap attorneys to defend the H.B. 56 law and to process Jefferson County’s bankruptcy. The going rate right now is $1 million per month or enough to fund a few attorneys. Maybe the law labour has to relocate and go to where the demand is? Any takers???

“Please Sir, I want some more.” Oliver,” Charles Dickens

The Center for Progressive Studies Looks at  Immigrants and the Child Tax Credit”
In order to fund the Payroll Tax Credit and instead of whacking the 1% of the taxpayers making > $500,000 annually; Congress has decided to whack the children of immigrants. Parents claiming a tax credit using the ITIN must now provide a Social Security number. Most likely, they do not have a legitimate SS number. Isn’t this like the feudal wars? Knights on horseback slaughtering the serfs and the peasants (Bruce?).

Benefits of the Child Tax Credit

2.3 million: The number of people, including 1.3 million children, who were kept out of poverty by the child tax credit in 2009.

$1,800: The average amount claimed in child tax credits by ITIN filers in 2010.

3: The number of months for which a family of four with two children could put food on the table using the average child tax credit refund under the Department of Agriculture’s “Thrifty Food Plan.”

$1.38: The amount of economic growth that results from every $1 spent on child tax credits. Not all tax cuts are created equal, though. The payroll tax holiday results in $1.25 of economic growth for every $1 spent, while making the Bush tax cuts permanent would result in $0.35 per dollar.

4 million: The number of U.S.-born children whose families would be affected by the proposed offset.

20 percent: The amount of the payroll tax holiday extension that would be offset by raising taxes on lower-income immigrant parents of American children. The payroll tax holiday extension is worth $120 billion. The proposed legislation to offset the tax cut, however, will, by conservatives’ own calculations, save a total of only $24 billion over 10 years.

About $100 billion: The amount of payroll taxes that will be contributed by ITIN filers over the next 10 years. These taxes contribute to the trust funds for Medicare and Social Security—programs from which immigrants will never recoup benefits because of their status.

$21,240: The average household income for ITIN filers claiming additional child tax credit refunds in 2010. This is less than half of the 2010 median household income in the United States of $49,445, and would mean that a family of four with two children was living below the poverty line. Latino children are more likely to be living in poverty than any other racial or ethnic group in the United States.

But injustice breeds injustice; the fighting with shadows and being defeated by them necessitates the setting up of substances to combat.” Bleak House, Charles Dickens; February 7th . . . belated Happy Birthday!

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Maggie Mahar to write for Angry Bear

Maggie Mahar has been has been showcased at Angry Bear in prior years, mainly in regards to healthcare, but has written on many topics with an economic theme. I am happy to announce she has agreed to write for Angry Bear, so please welcome her when her first post or two appears. Of course, readers, I am sure you will provide ample comment in the Angry Bear tradition. The following is a quick bio:

Maggie Mahar is the author of Money-Driven Medicine: The Real Reason Health Care Costs So Much (Harper/Collins 2006) and Bull! A History of the Boom, 1982–1999 (Harper/Collins, 2003), a book that Warren Buffett recommended in Berkshire Hathaway’s annual report.

She also narrated Money-Driven Medicine, a film based on her book, produced by Alex Gibney (best known for Enron: The Smartest Guys in the Room ) and directed by Andy Fredericks.
Bill Moyers called it “one of the strongest documentaries I have seen in years.”

From 2007 to 2011, she wrote the HealthBeatBlog, focusing on the economics and politics of heatlh care reform. The blog drew a loyal following made up of medical professionals, health policy experts, patient advocates., and others willing to take a skeptical look at our health care system.

Before beginning to specialize in health care, Mahar was a financial journalist. From the late eighties through the late nineties, she worte cover stories for Barron’s.. There, she covered both Wall Street and Washington, investigating and profiling corporate America while also writing about financial markets in the U.,S and abroad, with an emphasis on Japan and Russia.. After leaving Barron’s, she wrote a column about international markets and economics for Bloomberg.

Before becoming a journalist,Mahar was an English professor at Yale University.

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Cato has truly shocked me….stupefied really

by Michael Halasy
Cato has truly shocked me….stupefied really.

Those who have followed me at Angry Bear will recall my series on tort reform that I wrote this past year. In particular, I wrote a piece on the possible safety risks that patients would be exposed to, with a 0.02% increase in patient mortality with a 10% reduction in medical malpractice liability costs…

Well, just the other day, I received an update from Cato. Now, Michael Cannon is a good guy, and while he and I simply don’t agree on … well much of anything from a health policy perspective, his colleague, Shirley Svorny, wrote this:

More broadly, patients derive protection from an interdependent system of physician evaluation, penalties, and oversight that includes hospital and health maintenance organization credentialing and privileging activities, specialty boards, and the medical malpractice insurance industry. Underlying nearly all of these activities is the threat of legal liability for negligent injuries. Reducing physician liability for negligent care by capping court awards, all else equal, will reduce the resources allocated to medical professional liability underwriting and oversight and make many patients worse off. Legislators who see mandatory liability caps as a cost-containment tool should look elsewhere.

I believe that I have been consistent with this…over and over. There are some reforms that could work. So called “indirect” reforms. Joint and Severability reform, mandatory periodic payments, dedicated malpractice courts, patient compensation funds, etc. etc. But direct reforms, IE; caps on noneconomic damages DO NOT WORK.

So, I have to (gulp) swallow some pride, and tip my hat to Cato….Now I need to go take a shower. I feel a little dirty.

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Super Committee and GME funding

By Michael Halasy

Super Committee and GME funding

SO, about that super committee. Surely you remember, the gang of 12 that was created by the showdown over the debt ceiling this summer. Well, they’re hard at work but among the proposals out there, is one that is causing some grave concerns.

As a health workforce researcher, I understand implicitly the difficulties that lie ahead and the underlying shortage of physicians that will worsen dramatically by 2025. Current estimates suggest a shortage of over a 130,000 physicians by that time. Many, if not most, do not realize that physician training, at least the post graduate residency phase, is paid for by CMS (Center for Medicare Services).

Currently, as we all know, if the super committee does nothing, there will be an across the board 2% cut to all federal discretionary spending. Some of the other proposals are a little more concerning. In 2010, direct GME expenses totaled 9.5 billion. IME or Indirect Medical Education expenses totaled an additional 6 billion.
IME represents an additional 5.5 % payment to teaching hospitals, as it is understood that they not only teach other health professionals, but that there may be extra costs associated with education. Current proposals are to cut that rate in half (first proposed by Simpson-Bowles) to 2.2%. Among other proposals which include Home Health Co-Pays, SNF (skilled nursing facility) shared payments, raising Medicare eligibility to the age of 67, lies a proposal by the House Ways and Means Committee to cut GME funding by 15 billion over the next ten years, or a 15.7% cut. It is unknown at this time if the Committee will pursue this, but this is problematic.

Adding to the problem is the current GME Cap placed in effect in 1997, when several organizations were predicting an oversupply of physicians. This is not our current concern. This cap is problematic, and with the current budgetary concerns has no chance of changing. By 2015, we will have had over a 30% increase in medical school graduates from 2000. There is significant concern that also by 2015, we will not have enough GME residency slots for all US graduates, without even mentioning the several thousand US citizens who go to foreign medical schools every year.

States have already reduced the amount of money in the GME system, with only 41 states participating, and contributing a little over 3 billion annually. Nine additional states are now likely to opt out as well.

We need a serious look at discretionary spending, but this will only compound and weaken an already distressed healthcare system. I hope that the Super Committee strongly considers this, and looks to other alternatives.

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Guest post: AMA backs the mandate…

Guest post by Michael Halasy

AMA backs the mandate…

The AMA has its annual House of Delegates meeting last week, and boy, are they concerned. Recent evidence has suggested that they have lost 12,000 members since 2009. Much of this has been due to the AMA’s support of the PPACA. Today, the HOD voted to maintain the support of the individual mandate, (Chicago Tribune story here).

The problem with this concern is that it isn’t new. The AMA has been losing members for many years. They have also been losing money.
At one point in there history, the AMA was powerful, perhaps one of the most powerful organizations in the country. Politicians feared them. People respected them. But then, with the rampant specialization that really began in the early 1960’s, physicians started to jump ship. Many began to only belong to the rapidly rising specialty organizations, believing that they could tend to their interests as a specialty physician better.
Add to this, that the AMA chose to have battles with…..well, everyone. They fought against group practices, labeling them “communist”. They challenged the creation of HMO’s and vigorously opposed Medicare. They fought against the Doctor of Osteopathy (D.O.) profession. They challenged the creation of the Nurse Practitioner and Physician Assistant professions, and have continually challenged Podiatrists, Chiropracters, Optometrists, Psychologists, and virtually everyone NOT an M.D.
The end result was an organization that became a caricature. A cartoon. Like the boy that cried wolf, the AMA lost respect and wasted precious political capital in far too many small skirmishes that could have been negotiated instead of battled. During this time they lost a lot of members. Determining the peak of membership is difficult as the AMA does not make that public, but it seems that membership during the aughts has decreased by about 2-3% annually, with this latest decreased of 5% being the most substantial. This means that once you discount the medical students, residents, and fellows, you have at best about 19-20% of physicians represented. Once you discount retirees the number is closer to 15-16% of practicing physicians.
This is too bad, but this is a situation that they themselves created.

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Guest post: Massachussetts leads the way!

Guest post by Michael Halasy Practicing Emergency Medicine PA, Health Policy Analyst, and Health Services Researcher

Massachussetts leads the way

We have talked about bundled payments here, and getting rid of the antiquated and inefficient fee for service model. It looks like Massachussetts is on board suggests The Washington Post.

Blue Cross is not alone. At Partners HealthCare, the famous Boston-based medical system that dominates health care here, Massachusetts General Hospital has been conducting a Medicare experiment in which nurses are assigned to coordinate care for about 2,500 older patients with multiple ailments. The experiment, which began five years ago, so far has reduced hospital re-admissions by one-fifth and cut medical spending by 7 percent.

They will be the first to implement integrated care organizations (really, a version of ACO’s) and a new bundled payment mechanism.

With 98% of the population insured, Massachussetts saw their costs soaring, at about 15% above the national average. The markets have already begun to respond, and some, like Partners, are already ahead of the curve.

At Partners HealthCare, the famous Boston-based medical system that dominates health care here, Massachusetts General Hospital has been conducting a Medicare experiment in which nurses are assigned to coordinate care for about 2,500 older patients with multiple ailments. The experiment, which began five years ago, so far has reduced hospital re-admissions by one-fifth and cut medical spending by 7 percent.

Massachussetts was bracing for this for some time. Last year, the insurance commissioner took on the health insurance companies for raising rates too rapidly. He rejected many of them outright. This was an important political maneuver, that really set the stage for the current willingness and cooperation of the insurers, providers, and hospitals.

As he says:
“We are preparing ourselves to grapple with a certain amount of constructive disruption in the industry,” Patrick said in a lengthy interview. “It’s a journey.”
Clayton Christensen would argue that it is JUST that disruption which is so sorely needed.

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Guest post: Regional Disparities in Health Spending in Medicare

by Michael Halasy Health Policy Analyst and Emergency Medicine PA

Regional Disparities in Health Spending…

Jason Shafrin, over at the Healthcare Economist, brings up an interesting paper examining the data from the Dartmouth Atlas. For those that are unfamiliar, the Dartmouth Atlas is a compendium of data examining Medicare spending per beneficiary, and then comparing that spending by geographic region. The differences are stark. I know. I use the Dartmouth Atlas data in my health policy talks all the time. The data was highlighted in an Atul Gawande article in 2009 on McAllen, Texas. Jason points us to an article from the New England Journal by Zuckerman…

“Unadjusted Medicare spending per beneficiary was 52% higher in geographic regions in the highest spending quintile than in regions in the lowest quintile. After adjustment for demographic and baseline health characteristics and changes in health status, the difference in spending between the highest and lowest quintiles was reduced to 33%. Health status accounted for 29% of the unadjusted geographic difference in per-beneficiary spending; additional adjustment for area-level dif ferences in the supply of medical resources did not further reduce the observed differences between the top and bottom quintiles.”

Now, sure, health status may reduce the difference in spending, but it doesn’t completely eliminate it. In fact, I would argue that 33% is still a large difference, and one that still needs to be addressed. Comparing the spending in Florida to Minnesota PER beneficiary is quite startling indeed.

crossposted with Health Policy Wonk

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United Health Foundation report 2010

Via Forbes the new report by United Health Foundation notes that the health of the population of each state are:

…published by the United Health Foundation and funded by insurer UnitedHealth Group ( UNH – news – people ), measures residents of all 50 U.S. states on 22 activities that can predict future health, such as smoking and exercising, and events that have already occurred, like death or violent crime. Scores for each state are determined by gathering data from a variety of public and private databases, and calculating how much each state performs against the national average for each measure.

The report is here. (pdf file)

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