House GOP Warned on Fiscal Irresponsibility
From Politico: "House Republicans were cautioned Thursday in a closed door meeting with credit rating agency officials that a "death spiral" in the bond market was one of the possible outcomes in the event of default.
One official warned of a worst-case scenario in which a default on the nation's credit could result in a rapid drop in bond values, sparking chaos in the markets — a dramatic warning as Washington worked on a possible deal on deficit reduction and an increase in the debt limit."
Former Bush Treasury Secretary Hank Paulson, calling mounting debt "the single greatest threat to our nation's future," said Friday that the ceiling must be raised. "And the sense of urgency is clear — failing to raise the debt ceiling would do irreparable harm to our credit standing, would undermine our ability to lead on global economic issues and would damage our economy," Paulson said in a statement after a breakfast meeting with Treasury Secretary Timothy Geithner.
Read more: http://www.politico.com/news/stories/0711/59655.html#ixzz1SqaPWTwF
Read more: http://www.politico.com/news/stories/0711/59612.html#ixzz1SqLw5CgR
"For Medicare and Medicaid, Drama"
We're definitely in uncharted waters should the US be allowed to default on its debts August 2. Politico explores what might happen to Medicare and Medicaid should the unthinkable happen.
Consider this: Medicare Advantage monthly capitation payments don't get made in September. Despite it being over 100 in DC today, that cold chill down my spine offers no comfort.
Cut, Cap and Balance Crashes and Burns in the Senate
The Senate just rejected the idiotic House GOP bill to "Cut, Cap and Balance" the Federal budget. "It's one of the stupidest constitutional amendments I have ever seen," said Senate Budget Committee Chairman Kent Conrad (D-N.D.), a member of the "Gang of Six" that unveiled a bipartisan deficit-reduction framework this week. "It looks like it was drafted by two interns on the back of a napkin."
I couldn't agree more. Now that the wingnuts in the House have covered their collective asses next November, maybe we can get down to the serious business of saving the US as the premier global market to invest in.
Carmegeddon and the Drive Towards More Access
As many of you have heard, "Carmegeddon" took place over the weekend. A ten mile stretch of Los Angeles' 405 Freeway was closed for a full 48 hours. Why? To make it bigger of course! After all, pushing the same amount of traffic through greater lane capacity should reduce congestion in the country's busiest road…. right? Nope.
Notes policy analyst Steve Lafleur*: "LA drivers spend over half a billion hours per year stuck in excess traffic delays, which costs the economy roughly $12 billion dollars. Adding more freeway lanes seems like an obvious solution, except for the fact that it doesn't work. Studies have shown that every percentage increase in roads leads to an equal percentage increase in driving. In other words, more roads mean more driving."
Freeways aren't the only places where traditional notions of capacity are turned upside down. Dartmouth Atlas researchers famously showed that too much of a good thing might not actually be a good thing when it comes to physician visits, procedures and days spent in the hospital. The term was "distributional inequity," i.e., the numbers of specialists and hospitals in largely urban areas drives the quality and efficiency of patient care--- but not in the direction one might expect.
A traditional view of markets would hold that having more physicians would make stuff less expensive (supply and demand) and high quality (via increased competition). But Dartmouth researchers and proponents argue that hospitals need to fill their beds and physicians need to fill their appointment books. Supply increases demand.
In a 2007 report on utilization and equity, Dartmouth authors identified that Miami, Los Angeles, and Manhattan have overbuilt their acute care sectors, whereas Minneapolis, Salt Lake City, and Portland, OR have been frugal, using fewer hospital beds, less physician labor, and fewer expensive technologies such as ICU beds and medical imaging. The group saw excessive utilization increase in those "overbuilt" markets, with care intensity increasing everywhere, and growth in specialist visits and ICU stays escalating rapidly in high-cost regions. What constitutes "excessive" is a subject of heated debate but the latest FFS Medicare per member per month expenditures in those markets stand out: Miami: $1,236.51; Portland, OR: $615.41.
So while too little access causes problems (the Kaiser Family Foundation estimates that 60 million Americans lack adequate access to primary care, eventually driving up unreimbursed, emergency and acute care costs), it appears too much does as well. Of course access to what matters greatly. Since the ACA passed, much has been made of the fact that so many of the reforms depend on a robust, empowered system of primary care--- and it is PCPs we're in shortest supply of.
One can't help but think it's the definition of "access" itself that needs a close examination. I was reminded of this quote from Don Berwick: "The greatest potential for reducing costs while maintaining and improving the lot of patients is to replace visits with better, more flexible and fine-tuned forms of care. But almost all current payment mechanisms, whether enforced by the market or mapped into organizations by internal compensation systems, use impoverished definitions of productivity that actively discourage the search for and incorporation of non-visit care."
Maybe the best thing about non-visit care is the fact that you don't need to get in the car to have it.
*It should be noted that Mr. LaFleur is a Canadian, which may explain his un-American views on the automobile.
Dems Are Winning the Argument, Losing the War
Today's ABC News poll shows that:
- 62 percent of those surveyed believe we need a mixture of tax hikes and spending cuts to deal with the debt, compared with only 32 percent wanting spending cuts alone.
- By far the most popular specific measure for tackling the debt is ending the Bush tax cuts for those earning over $250,000 a year - with 72 percent support.
- Its only near rivals are more Medicare and social security means-testing for wealthy retirees.
- 77 percent think the GOP has been too unwilling to compromise, compared with 58 percent who say the same of Obama.
Of course, it's a national sample. The freshman who are driving this debate are responsive to their districts and--they will not hesitate to tell you--their conscience. The most remarkable thing about this "debate" so far has been the willingness of this class to commit to losing their seats. That is a mark of undeniable political courage in what has otherwise been a season of lunacy. With 33 seats up for grabs in 2012, you had better believe the Senate does not want to get painted with the House's brush.
GHG Overview and Analysis: NPRM on Exchanges
On July 11, 2011, the Center for Medicare and Medicaid Services (CMS) released two proposed rules to implement provisions of the Affordable Care Act (ACA) which authorize competitive marketplaces known as Affordable Insurance Exchanges, or "Exchanges," where individuals and small employer groups can compare private health insurance options on the basis of price and quality, enroll in qualified health plans and receive federal subsidies (or determine eligibility for other health programs such as Medicaid and CHIP). The Exchanges are effective beginning January 1, 2014.
- CMS-9989-P - Establishment of Exchanges and Qualified Health Plans
- CMS-9975-P - Standards Related to Reinusrance, Risk Corridors, and Risk Adjustment
- In addition, CMS issued a preliminary impact analysis
As promised, the GHG policy team has developed a summary and analysis of the release.
Please feel free to direct your comments to ghg@ghgadvisors.com, and/or leave your thoughts here as well.
The Boomers' Expanding Waistlines Bodes Dangerously for Medicare
The Associated Press reported yesterday that Baby Boomers are more obese than other generations, setting them up for unhealthy senior years: "For all the talk of '60 is the new 50' and active aging, even those who aren't obese need to do more to stay fit."
It's a scary portent of things to come, warning of greater rates of diabetes, heart disease, stroke, and the leading cause of reduced activities of daily living: Arthritis.
We clearly need some common-sense methods of helping the Boomers be more aware and proactive about their health in their later years, ideas that speak to the "one true thing" about Medicare beneficiaries: "If they ain't sick today, they're gonna be."
I got a letter this morning from Cass Apple in Atherton, CA in response to last week's Wall Street Journal story on Medicare cost shifts with just such an idea and I thought it needed to be heard.
Cass points out that "individual actions greatly affect the cost of health care... Current practice and law encourages annual physicals, during which height and weight are always measured. Physicians could report this only for individuals who had a body mass index below 25 and agreed to the reporting...That would qualify the individual for a fitness reward shown on every paycheck stub (Virtually no administrative cost for this). The amount would be no greater than the present value of the expected savings versus projected cost for individuals with BMIs over 25...computed annually. For example, the payroll tax is 1.45%, the Medicare Fitness Reward might be a separately shown credit of 0.75%...shown as a separate item on every pay stub. Why? Because future health is long-term and most people focus on the short term. They would see the reward every two weeks...and it is not difficult to imagine people bragging about it..."
Great thinking, Cass...common-sense, nonpartisan, and likely effective. Let's hope we see it and other novel ideas on a list of savers as we find our way out of our debt crisis.
The Plot Thickens on Florida Medicaid Reform
Government health programs geeks like me are closely watching developments in Florida as Governor Rick Scott attempts a drastic overhaul of his state's Medicaid program. The state intends to seek a broad waiver of Medicaid requirements from CMS on August 1 to force almost all beneficiaries in the state into health plans, including the Aged, Blind and Disabled.
The "ABDs" are considered by industry watchers to be the "Final Frontier" for health plans in the program, with most of the TANF population (moms & kids) already enrolled in HMOs. These are, of course, the most vulnerable patients in the health system, so how initiatives like Florida's go is a harbinger of what's to come in other states as more are forced to confront harsh budget realities.
As Florida's submission to CMS nears, advocacy groups are sounding the alarm. Florida's record on management of ABDs under the state's Section 1115 and 1915(c) waivers hasn't gone well and there is reason for concern about a rush into health plans for these beneficiaries.
But we've seen time and again how these vulnerable populations can be well-served by health plans when they are aggressively regulated and monitored by Federal and state officials: Minnesota's Senior Health Options (MSHO) or Medicare Part D for dual eligibles, to name a few.
The problem is Gov. Scott, the former CEO of HCA during its massive Medicare fraud case, is not a fan of government regulation or monitoring. If CMS makes too many demands, the Governor has threatened to eliminate Medicaid in his state altogether -- turning his back on over $14 Billion in annual Federal matching funds. You can imagine the politics around this filing. If he wins this game of chicken you can expect other states in similarly dire financial straits like Texas to follow suit.
CMS's handling of Florida's application this fall should be a clear indication of how much maneuvering room the Obama Administration will give to fiscally-challenged states -- and that's a long list. Stay tuned.
The "Potomac Two-Step" at its Worst
Last night the Cut, Cap and Balance Act of 2011 (H.R. 2560) was passed in the House by a vote of 234-190. The bill would cut and cap federal spending and would also require a balanced budget amendment to be passed by Congress prior to increasing the federal debt limit. The bill is more fiddling by House Republicans while the US burns and is not expected to pass the Senate.
The whole exercise is the "Potomac Two-Step" at its worst, a fools' errand and a terrible waste of time with US default looming on August 2, solely designed to pander to the allegedly fiscally conservative base.
For one thing, credit agencies will nuke US bondholders on August 3 unless the debt ceiling is raised -- and the Constitutional Amendment the House GOP put forward as a condition of raising the ceiling would likely take years to be ratified by the states, if it could pass at all. It's the height of fiscal irresponsibility.
Now, with politics out of the way for the children in the House, maybe we can find the path to a solution.
It's becoming clear that the Senate Gang of Six proposal is gaining momentum and may present the way out. The Wall Street Journal provides a great recap of the state of play. Cross your fingers.
Surprises in the Proposed Exchange Regulation
On July 11 HHS released the proposed Exchange regulation that will govern the new health care marketplace beginning in 2014. One of the issues that surprised me was the lack of detail on consumer protection.
While there are many and perhaps even competing provisions impacting consumer information e.g. from the Exchanges, call centers, new Navigator programs, and agents and brokers, there are few regulatory requirements on consumer protection.
As I read the proposed regulation, the QHP marketing practices and consumer appeals will be governed by state law and state insurance department oversight. While many states do an excellent job in these areas, we know from the Medicare Advantage experience that there were many undetected marketing abuses due to lack of state resources to oversee and enforce requirements.
Given current and worsening state budgetary situations, there may be a need for careful monitoring of early warning signs of consumer problems in the new Exchanges and qualified health plans. Consumer complaints and appeals should be the canary in the coal mine.