I’ve blogged a couple of times about what I think Healthcare Reform 2.0 will look like. Due to the 2014 election, I don’t think there is a chance of a major bill being implemented until 2021 at the earliest, but the basic thrust of my thoughts are based on the following logic:
The PPACA/ACA negoatiations left a lot of money on the table from a variety of rentier interests because those players were able to be involved veto actors if they were threatened. However, there is still a lot of money on the table that can be used to finance coverage expansion and benefit enrichment…
The goal of healthcare reform 2.0 or an Obamacare improvement bill would be to rejigger the political coalitions to focus on cost control instead of coverage expansion, and the greatest tool would be to allow the biggest buyer of healthcare services in this country to act like the typical biggest buyer of anything in this country. That means the federal government would use its size and its ability to say no to get good to really good prices on common items.
there are a couple big pools of money to pay for them. The easiest pools are durable medical equipment and Medicare drugs. Currently Medicare only puts some DME contracts out for bid in some locations. Expanding DME bidding to cover more products and the entire country should generate $100 billion over a decade. Medicare gets a significant discount on Medicare Part D drugs in the donut hole, but otherwise Medicare has to buy drugs at average wholesale price plus six percent. Medicare can’t be like the VA legally and tell suppliers that Medicare is the biggest buyer in the world for drug X so a good deal is necessary. Both of these steps leverage sheer buying power to get good prices for the American people. Reforming Medicare Part D and allowing a Veterans Administration like formulary would free up a couple hundred billion dollars as well.
Sarah Kliff at Vox has a round-up that shows this is the basic idea animating the Democratic Party wonks for 2016. The idea is that the Democratic Party, should, on the matters of healthcare, be a party of reasonably free markets with an emphasis on using large scale purchasing power to improve the public good looks to be the major health policy philosophy of the upcoming Clinton campaign as outlined in this Familes USA white paper from January 2015:
Reducing health care costs and making care more affordable: stopping uncompetitive provider consolidations, reducing high prescription drug costs, and making information on health care cost and quality transparent
On the health insurance side, margins are already fairly low, and there is some fat left to cut, but not much. On the provider side of the equation, there is plenty of fat left to cut on the basis of international comparisons. The major areas where the Democratic Party can get a lot of money out of the US healthcare system is on high end provider payments, drug costs and hospital payments while also expanding the lower levels of basic but very valuable care. Right now the US health system has numerous guilds and other anti-competetive practices in place which protect small, concentrated and powerful groups’ incomes while screwing the broader society by ringing up much higher healthcare costs without delivering amazing value in return.
A Democratic Party that wants to bust hospital monopolies would be bringing competition to lower prices instead of subsizing hooker and blow consumption. A Democratic Party that is empowering Medicare and Medicaid to actually negoatiate and bid for drug prices with clear authority to say no for outrageous pricing would lower costs while also shifting some of the drug development subsidy off-shore to other rich countries that currently bargain hard for their drugs. A Democratic Party that decreases the power of the doctor guilds to restrict medical immigration and overly expensive and restricted credentialling would see lower primary care costs while also seeing a redistribution of income away from Republican leaning constituencies to Democratic leaning constituencies.
It would be a Democratic Party that is pro-competition, it would be a Democratic party that is pro-free market, and it would be a Democratic Party policy decision that would send most of the established high cost medical provider political organizations straight into the Republican Party as the Republicans would be the party of current businesses and incumbent providers who want to protect their rent. Pediatricians, internists, CRNPs, PAs and immigrants will benefit from these changes, but the specialists and consolidated hospital systems won’t.
Over the long run, the provider restrictions need to be broken, and they will be broken as the providers scream for protection of their privilege to have the finest blow and the most exciting hookers.
MomSense
Do you ever get frustrated that there are reasonable ways of solving problems but we are incapable of being reasonable in our current politics?
piratedan
@MomSense: every goddamn day…..
ty Richard for posting on some of the things that should be in the national discussion but aren’t thanks to our national media and their marching orders….
Ryan
The phrase “hooker and blow consumption” really needs to be used more often in everyday conversation. I just shot coffee out of my nose!
Sherparick
Since Richard referred to Sarah Kliff at VOX on the Democratic Agenda for health care, I also saw that Ezra Klein had a article on the Republican “Obama Derangement Syndrome.” In that it recognizes that the majority of the Republican base is simply nuts when it comes to President Obama, it is good. But it seems to lack the historical memory that this same base was just as nuts when it came to Bill and Hillary Clinton (and will be again, forthwith). Remember, Barack Obama is only the second “Manchurian Candidate” in the White House, as Bill and Hilary Clinton were the apparent model for “The Americans’ as deep agents of influence from Moscow (where President Obama is either from Mecca or Tehran). http://www.motherjones.com/politics/2014/02/clinton-conspiracy-theories-kathleen-willey-chronicles
In the sixties and seventies, the right wing conspiracy theory was isolated away from the main culture (that FDR conspired to arrange Pearl Harbor, under the influence of Alger Hiss and other Communists at Yalta, that Harry Truman and Dean Acheson were fellow travelers in the International Communist conspiracy, that Martin Luther King and the peace Movement were creations of the KGB, etc.). But talk radio in the 80s and 90s, and then the Internet since 2000, we have seen every crazy meme thought up by the Right mainstreamed into U.S. culture.
JPL
Richard, next week Scotus will hear arguments from those who want to kill ACA. Your insight is always welcome, but I hope that your calendar allows you to comment during the arguments.
divF
There is an aggregation of good and bad things here. Primary care physicians (PCPs) are already being squeezed, both in terms of reduced earnings and work speedups, whereas surgical specialties are getting their high-end earnings preserved. Lumping the two together as “doctors’ guilds” is a fast way to drive away what are potentially valuable allies in the fight for healthcare for all, i.e. the PCPs. Similarly, expanding “medical immigration” should not be a high-priority item until the disincentives for entering the primary care specialties are reduced.
ETA: I see that you separate primary care and nursing below as beneficiaries in any changes in the system, but there is a risk that the pitch of “all those greedy doctors” will sweep them up and make things worse for them. For example, I don’t see how increased competition from medical immigration will improve the lot of these folks.
MomSense
@piratedan:
Glad I’m not alone. The media are, with a few exceptions, useless.
Bobby Thomson
This looks like one of those political cost~benefit analyses where almost the only people who understand the change are those threatened by it. Democrats are reluctant to motivate the hospital lobbies to finance a Republican wave election if they aren’t even going to get credit from the people they’re helping.
richard mayhew
@JPL: I will probably comment, but I am not a lawyer nor do I pretend to be one on this blog. From what I’ve read, anyone who is not invested in destroying PPACA, thinks the suit is a piece of shit composed of “reasoning” that should get second year law schools failed out of school, but we’re probably not dealing with legal judgments but political judgements.
richard mayhew
@divF: Agreed, increasing the PCP supply through changing the salary and reimbursement matrix, as well as increasing the scope of practice for CRNPs and PAs is a high priority. But increasing the supply of PCPs is not a sequential task to changing medical provider immigration, they can be parrallel.
Frankensteinbeck
@Sherparick:
No. It was not the same at all. There were crazy conspiracy theories about Clinton, but they were the domain of fringe nutcases like the 9/11 truthers. Whether or not Clinton had Vince Foster killed was not a mainstream issue every Republican candidate had to face like Birtherism was. Clinton faced obstructionism, but he faced 23 filibusters as opposed to 81. There was absolutely nothing like the fucked up attempts to force a credit default or the endless votes to repeal Obamacare. The Farm Bill and funding the military were not controversies under the Clinton administration. The impeachment was a political insult, but Obama faces political (‘You lie!’) insults so often we’ve learned to ignore them. The Supreme Court did not throw out precedent and get a reputation for deciding everything based solely on giving Clinton the middle finger.
Republican crazy during the Clinton and Obama presidencies were not even close to the same. It’s a difference in degree so great as to be a difference in kind.
jl
@Sherparick: There were rumblings about Eisenhower being a commie collectivist too, despite his miserably failed experiments in re-introducing unregulated free market to agriculture and some other sectors. Maybe that is why he tiptoed around in a namby-pamby way wrt to civil rights, doing just enough to keep the movement going, and standing up to attempts at state level nullification only when he absolutely had to. He realized he had to tiptoe around the nutcases and Texas oil billionaires he loathed so much.
jl
@Frankensteinbeck: You have a point. Seems to me that there was as much, maybe more noise about Clinton, but it was not translated into a official doctrine of obstruction and destruction, and then translated into actual practice.
Did any Senate leader stand up and announce that the strategy was to sabotage the whole Clinton administration and then go ahead and implement it? Not a rhetorical question, since I don’t know.
Frankensteinbeck
@jl:
Sort of. Newt Gingrich announced, tried, and backed off of a tactic of extreme obstructionism, but that’s mainstream during Obama’s presidency, a constant they’ve never backed down from since day one.
Let me boil it down to one point. Republican officials did not face rebellion and serious primary threats if they were seen cooperating with Clinton ever, on any issue. (EDIT) Chris Cristie taking federal relief funds would not have been an issue. It would not have been thought of as an issue. It would have been obvious and considered fucking insane if he’d waffled. During Obama’s administration, it’s heroism that he let himself be seen shaking Obama’s hand. No, there was nothing like that at all during Clinton’s presidency.
richard mayhew
@jl: On healthcare, and the balanced budget in 1993/1994, the Republican Party provided absolutely no votes for Clinton’s priorities. Kristol et al wrote multiple public memos that the political incentive as a matter of strategy was to make absolutely no concession to Clinton, and the crazy had already hit full stride by the spring of 1994.
The difference was in the details but not the strategy.
Frankensteinbeck
@richard mayhew:
The difference was in extent. In Clinton’s period they directed this kind of obstruction at issues of greatest Democratic advantage. In Obama’s presidency, they have done that as a sweeping policy even towards the most basic and obvious, previously bipartisan issues. This backed by and demanded by the screaming, paranoid demands of their base.
It’s the crazy that’s different, the way it’s everywhere and mainstream.
jl
@Frankensteinbeck: My main concern about your line of reasoning is that the ‘Obama’ effect might be confounded by timing of implementation of long run reactionary plans to gut any reforms that hurt oligarchical interests, monopoly power, giga-rich since FDR… no, since Wilson.. no, Theordore Roosevelt…. Eh.. no, make that Lincoln and US Grant the communist race equalizers and radical egalitarians.
We will see. Will be interesting to see whether the trend continues. I have typed that in a sense, the Obama derangement is Clinton II on steroids. We will see during the next Democratic administration, whether that poor slob has to deal with an Obama II and Clinton III GOP treatment on bad meth.
It it’s HRC, well… look for more GOP outreach towards that most difficult majority minority special interest group.
jl
@richard mayhew: Thanks for reminding me. Clinton miserably failed macroeconomic policy (ha ha, that’s a joke, son, a joke I say, it was a great success actually) passed with zero GOP votes, IIRC.
jl
Question for RM: differential insurance and provider chronic drug copays.
I heard a news report about a study that found odd differential copays for drugs for chronic disease in some insurance and provider plans, One of biggest was for HIV/AIDS, but everything from arthritis to COPD to diabetes was mentioned, actually many chronic conditions were mentioned, I just can’t think of one near end of alphabet right now. Was mentioned that only explanation authors found was attempt to avoid these kinds of patients, aka, cream skimming and cherry picking. I thought it was in New England Journal of Medicine, but have not been able to find it.
Has RM heard of this study? Know any inside dope on this topic?
I think it is publicly available now, so link to journal below (page with article in new issue on behavioral economics and insurance plan selection)
Healthcare.gov 3.0-Behavioral Economics and Insurance Exchanges
New England Journal of Medicine
http://www.nejm.org/doi/full/10.1056/NEJMp1414771
Also, for those interested in interested in infectious disease control, NEJM reports prospect of elimination of yaws. Yaws is not pretty, probably would be a BJ category slightly less appetizing than proper pet poop bag selection.
jl
Found it:
Using Drugs to Discriminate-Adverse Selection in the Insurance Marketplace
NEJM, Jan 28, 2015
There is evidence, however, that insurers are resorting to other tactics to dissuade high-cost patients from enrolling. A formal complaint submitted to the Department of Health and Human Services (HHS) in May 2014 contended that Florida insurers offering plans through the new federal marketplace (exchange) had structured their drug formularies to discourage people with human immunodeficiency virus (HIV) infection from selecting their plans. These insurers categorized all HIV drugs, including generics, in the tier with the highest cost sharing.2
http://www.nejm.org/doi/full/10.1056/NEJMp1411376
I assumed the article was just released, since that is when you tend to hear splashy news reports on them.
Maybe RM covered this and I missed it? If so, my apologies for killing so many electrons on it in comments.
MomSense
@richard mayhew:
Ok, but Clinton’s healthcare plan didn’t even make it out of committee–any committee in both the House and Senate.
Frankensteinbeck
@jl:
They just might be as misogynist as they are racist, so if it’s Hillary you’ll see a whole lot of bullshit. I predict it will be different, however, based on their different prejudices towards blacks and women. As a black man, Obama scares them. They behave as if they’re terrified and desperate, with nothing left to lose. As a woman, they have contempt for HIllary. You will see less fanatical obstruction and much more overt admissions of personal hate and obviously gender-based insults. They will see her as vulnerable, and try to victimize rather than fight her. Misogyny is much more publicly acceptable, and they will not hide behind code words the way they do with their racial objections to Obama.
Ron Thompson
“I don’t think there is a chance of a major bill being implemented until 2021 at the earliest,”
So you figure that by 2021 the Democratic Party as we have known it for the past 25 or more years will be dead, and a change for the better in healthcare will be possible? Hope you’re right.
MomSense
@Frankensteinbeck:
I think that part of the problem is that the Republican economic and anti social safety net agenda is so rooted in racism. It’s not just that they feel racial animus toward the President and use coded language in opposition to him, it is that Republicans have been selling their candidates and their economic agenda for decades using coded racial reasons. Obama fits nicely into their existing racist structure.
richard mayhew
@jl: @jl: I did not cover that specific study from NEJM… but last summer in one of my better (if I may say so) posts, I looked at differential pricing for HIV drugs:
https://balloon-juice.com/2014/07/30/aids-formularies-and-greshams-law/
Basically cherry picking is being attempted or actually rotten apple throwing is being attempted as health plans have strong incentives to make themselves as ugly and bad as possible to known high cost members, and once one health plan in a market goes that route, every other health plan has to go that route, especially as the risk corridors are not being funded for 2015 and 2016.
richard mayhew
@Ron Thompson: No, I’m counting on that any attempt to mildly restrain costs and or improve access to health care requires at least 218 votes in the House, and 51 in the Senate and given recent history of my life time and that of my parents’ life times, 90% or more of those needed votes have to come from Democrats. 2021 is the earliest moment where a possible passing coalition could be in place.
jl
@richard mayhew:
Thanks for link to earlier post. I will read it.
” the risk corridors are not being funded for 2015 and 2016. ”
Thanks for reminder, actually more than a reminder, I didn’t know, or forgot, they were not being funded in 2016 too.
Sadly, not much time for me to keep properly informed in all the policy gyrations.
simon
I suppose you could build a medical system around undertrained practitioners who don’t even know what they don’t know, but why? Hating on doctors salaries and their “guild” is easy but analyzing how high their salaries really are when you take medical debt, hours worked and years of training into account is more difficult.
Simon
For example, a neurosurgeon makes big bucks, but he went into 200k debt for medical school then worked 80-100 weeks for almost minimum wage for 7 years after that. Should we decrease his pay? Or should we cut out the need to get a college degree and subsidize his medical education? Also, trying to get med students to go into pcp while giving their positions away to nps is not exactly a formula for success.
jl
@simon: Not clear to me that is what anyone suggested in post or comments. I see suggestions to raise pay and supply of primary care doctors (as well nurse practitioners, phys assts, other primary care providers), and reduce supply and pay of US specialists. US has very large supply of and very highly paid specialists compared to other high income industrialized countries. I think only Netherlands has specialists with comparable pay, but they are much smaller proportion of that country’s providers.
You think anything less that US specialist is under-trained and underpaid? Or you think a nurse practitioners are so poorly trained that they ‘don’t even know what they don’t know’ when doing primary care (I assume no one is suggesting that they do surgery)?
mclaren
Of course a serious proposal to reform healthcare in America would genuinely rethink things, instead of tinkering around the edges to slightly reduce the massively engorged corrupt profits of bribe-taking doctors and bribe-taking hospitals and bribe-giving medical devicemakers and giant pharma companies.
For example: why do we need big pharma for-profit companies at all?
Why not let NIH develop the drugs, then sell them to citizens direct at cost? Pennies per pill, instead of hundreds of thousands of dollars per treatment regimen.
Well, we all know why Richard Mayhew doesn’t propose this kind of reform…because it would crash the corrupt greedy profits of for-profit health insurers like the one Mayhew works for. Charging a healt insurance premium of 2% per annum of a $100,000 per year treatment regimen is obviously vastly more profitable than charging a health insurance premium of 2% per annum of a $10 per year treatment regimen.
Guys like Mayhew would have to start riding the bus instead roaring around in a high-end Mercedes and taking their 6-year-old to the local library instead of to New York. Can’t have that happening!
Richard Mayhew
@mclaren: Hey fuck nut — I take the local bus to work everyday, and my trip to NYC was a gift from my brother as I was his best man at his wedding. The flight was paid for with frequent flier miles, and I slept on the floor while my daughter slept on the pull-out couch. Truly the height of luxury. So please go fuck yourself with a rusty hacksaw.