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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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CGI, Day 3 – Addressing Cancer in the Developing World: Health Equity and an Overlooked Public Health Crisis

The panel is preceded by this video.

Dr. Sanjay Gupta (Chief Medical Correspondent, CNN) leads the panel, featuring:

Lant Pritchett’s old point notwithstanding, the reality has become that the “developing world” now originates 56% of the cases of cancer in the world, up from ca. 14% a decade ago.  (Actually, this somewhat presents evidence for Mr. Pritchett’s point about trade-offs; the developing world is now able to live long enough and well enough that death from cancer has become important.)

Dr. Gupta starts by celebrating that some cancers that were not able to be treated anywhere in the world are now treatable everywhere in the world.  But the developing world cannot afford treatments for some types of cancer to the level needed. Dr. Gupta is a Board member of Livestrong, and speaks about the way the organization—especially through the discipleship of Lance Armstrong—has changed the way many people think about cancer.

HRH Princess Mired notes that much of the progress in Jordan occurred after King Hussein himself went very public with his battle with cancer, putting a public face on the disease.  HRH Mired notes that since then, the major cancer treatment center—the King Hussein Cancer Center—now includes the word “cancer” in its name and provides access to consultations, information, and treatment for people who live near the center and those who can communicate with it through a regional center.

She notes that there are areas in which they would like to make progress in Jordan, such as establishing Cord Blood Banks, and other things that people in the developed world “take for granted.”

Dr. Gupta asks Dr. Paul Farmer to speak specifically about Haiti.  Dr. Farmer notes that there is one (1) oncologist in Haiti, and none in Rwanda or Burundi.  It is difficult to use preventive measures once one already has leukemia—but need to make that much more of an effort in prevention and early detection.  Dr. Farmer notes that cervical cancer is a communicable disease;  there is a “cervical cancer belt” in the developing world.  There is a vaccine, there are preventive care activities, and there are many other possibilities for reducing the rate of death from cervical cancer—it is delivery mechanisms and education that need to be provided. (Dr. Farmer notes, for instance, that Partners in Health teamed with Gardasil to provide vaccinations for young girls and women in Haiti.)

Next up is Dr. Charles-Patrick Almazor, who reaffirms that there is significant progress that has been made, and notes some of the “on the ground” successes in post-earthquake Haiti.

Felicia Knaul and Lance Armstrong join the group.

Dr.Gupta notes that Lance Armstrong came to CGI and announced that he would be racing again, primarily to extend the reach and successes of Livestrong.  Armstrong notes that he wasn’t worried so much about the idea of winning another Tour de France or any “knock on [his] legacy” as he was in extending the work of the Livestrong Foundation.  And he believes that the effort has paid off well in those terms.

Ms. Knaul (who has a Ph.D., and therefore might be more properly referred to as Dr. Knaul), whose original commitment was “enhancing and empowering women health care workers,” notes that breast cancer is now the #2 killer of young (ca. 30-54) women in Mexico and the developing world. Ms. Knaul is a breast cancer survivor herself, and notes that what is worse than “having to take it in the vein is not being able to because you don’t have enough money to be able to pay for it.”  (Note: Ms. Knaul’s last round of treatment was last Wednesday; technically, she is not yet “a cancer survivor.”) She moves on to speak of “other kinds of failures,” such as the women who do not get mammograms because they expect that their husband will leave them if they are diagnosed with breast cancer. In that context, the Commitment made yesterday to teaching men is most encouraging for her.

Ms. Knaul also notes that she was in the audience when Lance Armstrong announced his Commitment in 2008, and that she herself was inspired by his actions to expand her own efforts.

Dr. Gupta highlights a few people in the audience who are also working to reduce cancer, including John Noseworthy of the Mayo Clinic, who “established the Healthcare Alliance for Tobacco Dependence Treatment” to work to support realization of the WHO Framework Convention on Tobacco Control; Dr. Lawrence Shulman of Dana-Farber and Harvard, which is working in several of the developing areas; HRH Princess Ghida Talal, who is leading an effort to establish a “personalized medical center” at the King Hussein Medical Center; and Letha Sanderson of Uganda, the founder of Wrap Up Africa.

Dr. Gupta asks Dr. John Seffrin of the ACS to talk about the American Cancer Society’s efforts to reduce tobacco use in developing countries. Dr. Seffrin notes that cancer is becoming the #1 cause of death in the world “for the first time in all of history.”  Livestrong and the ACS published a study about a month ago, noting that the cost to the world is about $895 Billion per year, “not including health-care costs associated with the treatment of cancer.”  The economic burden of the top fifteen diseases shows clearly that cancer is far and away the worst.  And the spread of smoking tobacco has clearly exacerbated this in the developing world.  Killed 100 million people in the last century; will kill 1,000,000,000 in this century if there is no intervention.

The first question from the floor is about possibility of using of local herbs and natural

Fran Drescher, a CGI regular whose own commitment in this area can be found at the link,  follows, asking how we educate and motivate women to go from “My husband will leave me if I have cancer” to “What will happen to my family if I die of cancer?”  Princess Mired notes that taboos don’t come from nowhere; they come from ignorance. People start from the expectation that cancer is contagious, that prevention and early detection are not possible.  Need to have the information disseminated, and especially to work on the men to change both the social behavior.  In four years, they have reduced the rate of people in Stage 3 and Stage 4 cancer from 70% to 35% through an”early detection” program that was started after people started to see survivors. Need to show survivors.

Ms. Knaul notes that the mortality rate in Mexico from cervical cancer has gone from 16% to 8% in the past ten years—primarily because of earlier detection and treatment, but also because of improvements in the treatment itself.  She notes that this especially can be applied in the Developed World, where opportunities for research and

Jonathan Quick of Management Sciences for Health noted the parallel between treating cancer and treating AIDS in the developing world. In the case of AIDS, they got through the four “barriers”: (1) the mental barrier (“it can’t be done”), (2) the cost barrier (treatment costs reduced from $12,000 to $3,200), (3) the money barrier (addressed by a global fund), and (4) the “practicality barrier.”  Where are we with cancer?  Dr. Farmer notes that those four barriers have been overcome in many cities, but that rural areas still need all four barriers to be overcome.  “People who say “there is no market” are trying to stop a conversation, not start one.”  When you don’t know any survivors in your neighborhood, it’s more difficult to accept that one can survive.  (The examples of King Hussein and, especially, Lance Armstrong seem especially relevant.)

Dr. Gupta asks Lance Armstrong about Livestrong’s decision to “go global.”  Armstrong notes that they were responding to demand: discovered that the idea of Livestrong resonated in places such as Mexico and India.  It is left to Mr. Armstrong to note that cancer is such a diverse disease—“we talk about cancer—boom, six letters—but it’s different than that.”  It’s correct to be honest about it:we’re going to have to knock of this disease on type at a time.  We know the diseases we can cure today (testicular cancer, some lymphomas, cervical cancer and breast cancer with early detection).  “It’s not a simple three-page document, but it is doable.”

With straightforward chemotherapy approaches, have been able to cure kids with various sarcomas.  We do have to scale up the program.

Former HHS Secretary Donna Shalala asks about geography: having to travel reduces ability to treat rural cancer patients..  She notes that more than fifteen years ago, Egypt set up regional cancer centers and flew oncologists to those areas once a month—a great political and popular success. (There were also pay incentives for the oncologists, to cover the travel requirement.)

Ms. Knaul notes that. when you add the technologies available, you don’t necessarily have to move the patient or the doctors so much; St. Jude’s is able to offer pediatric cancer care in Jordan while the oncologist remains in Memphis.  Princess Mired re-emphasizes this, nothing that the Jordanian doctors have weekly “training sessions” with the doctors in Memphis.

Have to understand that cancer has potentially become the most curable of all diseases; could be saving 10,000 lives a day if could apply the advances in the United States alone to the rest of the world.

Lance Armstrong again takes it down to a human level:  if we teach a kid never to pick up a cigarette, we just “cured” cancer.  Need to re-emphasize sharing: information, resources, programs.

Ms. Knaul notes that there are some countries, such as Mexico, that are considering financing reform so that people have access to cancer treatment—a move that will strengthen the health care system itself.

Dr. Farmer talks about competition, competing for scarce resources.  Only a partnership will work.  Resources are less limited than at any other time in human history.  Cannot make the same mistake—contrasting prevention with care—that was made in the past.  One of the main causes of death is that people become destitute providing care.  Need for that not to happen.

Dr. Almazor presents optimism; Princess Mired notes that we cannot change our future without change.  “Cancer does not even appear as a line item on any Global Health Agenda.” All of the successes and survivors—AIDS, TB, etc.—have the specter of having to face cancer and heart disease.  She closes by noting that we need to measure the cost of cancer not in human deaths, but prefer to see hospitals and treatment centers that remedy the problem.

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Virginia opposition given standing in federal district court

by Linda Beale
Excerpt from Ataxingmatter

The post in its entirety can be found at Linda’s Ataxingmatter Health Care Reform: the Virginia opposition given standing in federal district court:

The judge states that the “central issue” in the case is Virginia’s interest in upholding it’s “health care freedom act”–a declaration that Viriginia citizens do not have to buy insurance (in spite of the federal mandate). As Jack Balkin so ably comments (see link below), the judge’s acceptance of this argument opens the way for states to challenge anything in the Internal Revenue Code by passing a declaratory resolution indicating that they don’t think it should be treated as constitutional or that conflicts with the particular provision in question.

As for the commerce clause power, the court also treats Wickard v. Fillburn (the Supreme Court case that held that growing wheat for one’s own use is subject to the commerce clause power) as not decisive on this issue. Virginia claims that the decision not to purchase is not an economic act, compared to the decision to purchase or the decision to grow one’s own as a substitute for purchase. That distinction does not appear to have any merit. The decision not to purchase insurance and the decision not to purchase wheat are surely similar decisions to try to avoid the commercial flow by managing on one’s own. Yet surely one’s interaction with the health care system is much more clearly a question of interstate commerce even than one’s ability to grow wheat at home and avoid the purchase of wheat–even people who pretend to provide their own health care at home will at one time or another impinge on the health care system in all likelihood, whether because they are in a transportation accident, an accident outside their home, a work injury or illness, or taking advantage of free medical care such as vaccinations, etc. The judge however, concludes that the precedent is inconclusive and that the government has failed to show that the state has not stated a valid commerce clause claim.

Finally, the judge follows Virginia in conflating the Commerce Clause and Taxation Power arguments. It accepts the idea that if “economic inactivity” (which is a misnomer, since it is clearly economic activity to provide one’s own care, just as imputed income from providing one’s own home is real economic activity) is not accessible under the commerce clause, then it shouldn’t be reachable under the tax power. This is an extraordinarily poorly reasoned section of the opinion.

For a thoughtful and articulate analysis of the standing issues, see Jack Balkin’s blog, Judge Preserves Constitutional Challenge to Individual Mandate (Aug. 2, 2010) [hat tip Ellen Aprill and the Tax Prof discussion group].

Allowing this case to go forward leaves health reform in turmoil. It could take years for the different cases to wend their way through the courts, and ultimately the Supreme Court will likely have to rule.

Linda Beale
———————————————–

Beverly Mann, whose expertise is in certain areas of constitutional law and federal-court jurisdiction at the Annarborist, and who guests at Angry Bear, notes on the same topic (lifted from an e-mail to me):

Yeah. I read Lyle Denniston’s article about that opinion on Scotusblog a couple hours ago, and this sentence really strikes me: “‘While this case raises a host of complex constitutional issues,’ the judge wrote, ‘all seem to distill to the single question of whether or not Congress has the power to regulate — and tax — a citizen’s decision not to participate in interstate commerce’ — that is, a private decision not to buy health insurance.”

Actually, the argument that that part of the legislation is within Congress’s purview under the Commerce Clause is that a citizen’s decision not to participate in interstate commerce—that is, a private decision not to buy health insurance—actually is not a decision not to participate in interstate commerce but instead (for many people at least) a decision to participate in interstate commerce by having others pay their emergency medical bills. If they are, say, injured in a car accident and treated at a hospital and then cannot pay their medical bills, the public pays those bills.

The problem with the judge’s argument is that people do not decide whether to have a serious medical emergency. When they do have one, and they receive major medical treatment, there is a bill for that.

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The Maine Chance

Robert Waldmann

One strange thing about the health care reform debate is that insurance companies claim to support reform. I have tended to suspect that they are just playing possum.

Now I find positive proof that WellPoint is willing to do what it takes to make sure health care reform passes — they sued the state of Maine claiming they have a constitutional right to make a profit !?!

In fact they seem to support a public option. It will be a bit hard for Sens Snowe and Collins to explain why they think no public option is needed after this.

I have a challenge. Can anyone think of anything anyone could do which is better for the public option that this ?

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Quote of the Day

Health Affairs tells the truth and shames…well

Unlike for-profit firms, a public plan has no incentive to cut corners and prevent providers from giving their patients quality evidence-based care, because its ultimate goal is public health, not private profit. Nor does it have any interest in sideswiping regulations and shortchanging consumers. Free market proponents argue that private health insurers should be lightly regulated to give Americans the best value. We have seen the results of that sort of regulatory neglect in many industries in the past eight years; the harm to all Americans, businesses and the overall economy could not be more profound.

Read the Whole Thing, since you probably won’t find it being cited at The Atlantic.

UPDATE: Bonus quote, since it gets to the core of the matter:

[Health insurance is an] oligopoly [market] with high entry barriers in which prices and profits have escalated rapidly.

Traditional economic theory holds that there are no economic profits in a true market.* That the Health Insurance industry has realised higher profits while spending a lower portion of each dollar received on claims over the past twenty years is, economics tells us, an indication of market failure. Strangely, the mass of economists don’t seem to be saying this. Which is a market failure of another type.

*There is, of course, a fair Return on Investment embedded in the equation, but that is assumed to be the stable risk-adjusted return, not increasing in an equilibrium state.

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