Why Americans spend so much on health care: The big picture

Stimulated, like a lot of people, by Bernie Sanders' single-payer healthcare plan, I spent some effort this week speculating about how the U.S. might attain affordable healthcare for all. Government efforts focus mainly on how to strain out wasteful care, how to coordinate care, how to pay for performance. To my mind, a possibly more important question is: how to gradually squeeze down payment rates for hospitals, doctors, and pharmaceuticals?  How to move toward all-payer if not single payer -- that is, phase out or reduce healthcare providers' divide-and-conquer leverage?

3 a.m. this morning,* looking for something else on my Kindle, I stumbled on a book I'd bought and forgotten about that offers a very different answer as to why the U.S. spends so much more on healthcare than comparably wealthy countries. The authors made quite a splash with their central hypothesis four years ago**, and their insight is no secret, but it had faded into the background for me.

The book is The American Health Care Paradox: Why Spending More is Getting us Less, by Elizabeth H. Bradley and Lauren A. Taylor.  Their answer: we spend more because we're sicker, and we're sicker because we spend less than peer countries on social services that have a bigger impact on health than medical care does: housing, nutrition, education, the environment and unemployment support. Here's the core argument:

Ignorance vs. unaffordability among the uninsured

As the ACA's third Open Season for private health plan enrollment draws to a close, enrollments are flatlining, and at a low level. Barring an enormous last-minute surge, it looks like HHS's preseason lowball estimate, with a midpoint of about 12.6 million total enrollments by Jan 31, will be on target.

At the same time, the Kaiser Family Foundation's latest health tracking poll indicates that most of the uninsured who are eligible for aid  have not been contacted and/or don't know what aid is available:

In terms of enrollment engagement and efforts to get coverage, most of the uninsured say they have not been contacted about signing up for coverage (67 percent) or that they have not tried to get more information on their own (57 percent). More specifically, most uninsured say they have not taken steps to figure out if they are eligible for the two main coverage expansions under the ACA — Medicaid and financial assistance to purchase health insurance through the healthcare marketplaces. Over 7 in 10 saying they have not tried to figure out if they qualify for Medicaid (72 percent) or for financial assistance to purchase health insurance (79 percent) in the past 6 months.

Those numbers give a somewhat exaggerated impression, as only 49% of the uninsured are eligible for Medicaid or private plan tax credits, and 10% of those are children eligible for CHIP. Still, many prior surveys -- e.g., by the Urban Institute and McKinsey & Co. -- have focused on the aid-eligible uninsured and found that majorities don't know what's on offer. Further, a previous Kaiser survey found that large numbers of the aid-eligible uninsured who did explore obtaining insurance received the false impression that no aid was available (I explored several ways that may happen here).

A question for healthcare economists (update)

I have a question for healthcare economists. Bear with me through a few bullet points to get there. [Note update at end: there's an answer of sorts in Kenneth Thorpe's analysis of Bernie Sanders' plan.]

• It's well known that the U.S. pays far more for healthcare -- per capita, per procedure, and as percentage of GDP --  than any of its developed-world peers. According to the OECD, the US spent 16.4% of GDP on healthcare in 2013. The next highest spenders, Holland and Switzerland, spent 11.1% of GDP.
  
• A main reason, if not the driving reason, is that in the U.S. healthcare payers are fragmented, diminishing their buying power. Private insurers and self-funded employers pay rates that may average 150-160% of Medicare rates.
  
  

The chief fallout from killing Kynect

Articles about the plans of Kentucky's new Republican governor, Matt Bevin, to junk Kynect, the state's home-grown ACA exchange, and switch to Healthcare.gov don't always make it entirely clearly where the loss or risk lies.

There's the waste of some $290 million in federal grant money used to build Kynect, and  $23 million in one-time expenses that the outgoing Beshear administration estimated it would cost to move to the federal exchange. But since the choice of website does not in itself threaten the Medicaid expansion or change private plan offerings (though it may bump up prices, since HealthCare.gov charges insurers a higher assessment than Kynect has), wherein lies the operational damage?

As Democrats mull how change works, consider Obama

Bernie Sanders' light sketch of single-payer healthcare Utopia has got Democrats debating their theory of change. Generate mass support for fundamental restructurings -- of healthcare, banking, wage law --or take any step you can, by legislative compromise or executive order, to make current institutions more progressive?

Obama is often held up these days as a proto-Bernie who stoked the thirst for swift transformation in 2007-8 and then disappointed. But if  Hope and Change was the Obama trumpet call, his bass note was always slow, hard, pragmatic step-by-step progress.

Even at his most apparently messianic, Obama has always stressed the incremental nature of change for the better. As I've noted more than once, the key words here, on the night he clinched the Democratic nomination in 2008, are began to:

For legally present non-citizens, a sometimes twisted path to ACA enrollment

This week, CMS announced that it was tightening the criteria under which people who want to buy health plans in the ACA marketplace outside of the annual Open Season for enrollment can obtain so-called Special Enrollment Periods.  SEPs are granted when special circumstances create a need to buy or change insurance plans -- for example, job loss, marriage or childbirth. The tightening is in response to insurers' complaints that SEPs are too easy to obtain and people are gaming the system, 

CMS has eliminated several causes for granting SEPs. Two pertain specifically to immigrants:

• Lawfully present non-citizens that were affected by a system error in determination of their advance payments of the premium tax credit
  
• Lawfully present non-citizens with incomes below 100% FPL who experienced certain processing delays

Why were these SEPs created in the first place? And why are they now deemed obsolete or counterproductive?

You've heard of narrow networks? Get ready for narrow deductibles

As deductibles and co-pays in health plans sold in the ACA marketplace continue to rise, HHS has stressed the fact that many plans offer significant services, such as doctor visits and drugs, that are not subject to the deductible.

In Southeast Pennsylvania (which includes Philadelphia), Independence Blue Cross offers a silver HMO plan that almost turns the whole concept of a deductible on its head. For a buyer who does not qualify for cost sharing reduction subsidies, the deductible is $1,500 -- relatively modest for a silver plan sold on the exchanges. But most services are not subject to the deductible. Here's the basic deal (for an unsubsidized 40 year-old in Philly):

Minnesota to consider extending public health insurance to most of those eligible for ACA subsidies

An update to my article about MinnesotaCare, Minnesota's public insurance program that in 2015 was converted into a Basic Health Plan under the ACA, serving residents with incomes up to 200% of the Federal Poverty Level:

On Friday, the state's Health Care Financing Task Force did vote (as my prior piece anticipated) to recommend extending MinnesotaCare eligibility up to 275% FPL -- which had been the eligibility cutoff before the ACA. That would take care most of those who would otherwise be eligible for subsidized private plans under the ACA.. The task force split along partisan lines, however, with no Republicans voting for the change, which would entail applying to HHS for an "innovation waiver" to alter the ACA subsidy structure (MinnesotaCare would be the only option for insurance seekers up to 275% FPL, as it now is for those with incomes up to 200% FPL).

As Republicans control the state's House of Representatives, the change is unlikely to happen this year. Republicans would go the other way and replace MinnesotaCare with subsidized private plans.  One option before the task force was to sweeten the ACA's private plan subsidies for those in the 200-275% FPL range to a level comparable to what MinnesotaCare would offer. That would cost the state considerably more than extending MinnesotaCare to 275% FPL. I don't know whether Republicans on the task force endorsed the sweetened-subsidy option or just want to go with an unvarnished ACA subsidy structure.

Among the newly Medicaid-eligible in Louisiana: 50,000-plus private plan enrollees

Congratulations to poor and near-poor residents of Louisiana, whose new governor, John Bel Edwards, signed an executive order embracing the ACA Medicaid expansion, targeting July 1 as the implementation date.

And a gentle reminder to the state's healthcare officials that the estimated 300,000 Louisianians newly eligible for Medicaid will include about a third of those enrolled in private health plans through HealthCare.gov.

According HHS statistics, 47% of the 175,382 private plan enrollees for 2016 for whom income data is available had incomes between 100% and 150% of the Federal Poverty Level. At least two thirds of them, or 55,000, probably have incomes under 139% FPL and are thus Medicaid-eligible (and technically, no longer eligible for private plan subsidies, though they doubtless won't be taken away from those who don't switch). That number should grow before the end of Open Season on Jan. 31.

A thought about Trump

His rage is real but disassociated:

@ThePlumLineGS He will say anything that works and taps followers' anger. But vicious response to those who insult/cross him bespeak rage.

— xpostfactoid (@xpostfactoid1) January 15, 2016

@xpostfactoid1 interesting, thanks

— Greg Sargent (@ThePlumLineGS) January 15, 2016

Two caveats. First, over the years Trump has doubtless learned that all-out aggression against anyone who gets in his way or challenges his self-love "works" -- so it's hard to separate calculation from the emotion behind the strike-back reflex. Second, Trump's vicarious rage against the (wrongly) alleged Central Park rapists and prospective Indian casino builders may have had an emotional component -- the rage reflex easily attaches itself to prejudice. But as for his political targets, it's obvious that he'll take up any attack that gets a rouse out of his follows

Facing the Facebook music

I'm a Twitter addict who doesn't much like Facebook. I've been uncomfortable reaching out to healthcare tweeps on my personal Facebook page, or to anyone I don't know personally. Yet I've read that Facebook is a far more potent vehicle for reaching potential readers than any other social media platform. Ergo, I'm giving it a whirl via an xpostfactoid Facebook page, where I'll, um, post posts -- my own, and others that seem worth highlighting/discussing.  Hope you'll give it a look, and a like (or share). If anyone has any suggestions as to how to make it something other than a blog duplicate, I'm all ears.

Update: I think I'm going to like posting/kibitzing on healthcare news of the day on this page. 

Obama on polarization: I failed, we will succeed

I found the first half or so of Obama's final SOTU pretty anodyne, and I did not like the scalp-waving -- 'just ask Osama,' etc.  But there were two points on which I thought he got intensely real -- both involving the dangers of what we as a country might do to ourselves.

The first was putting the threat from ISIS and other terrorist networks (current and future) in its place:

But as we focus on destroying ISIL, over-the-top claims that this is World War III just play into their hands.  Masses of fighters on the back of pickup trucks and twisted souls plotting in apartments or garages pose an enormous danger to civilians and must be stopped.  But they do not threaten our national existence.  That’s the story ISIL wants to tell; that’s the kind of propaganda they use to recruit.  We don’t need to build them up to show that we’re serious, nor do we need to push away vital allies in this fight by echoing the lie that ISIL is representative of one of the world’s largest religions.  We just need to call them what they are – killers and fanatics who have to be rooted out, hunted down, and destroyed.

In effect: this is the Barbary Pirates, not World War III.

The second was an extended warning about the road to oligarchy -- paved with polarization, campaign finance gone wild, voter suppression and demagoguery. There were two parts to it: the emotion of dysfunction, and the machinery of it. First, the emotion:

What's a healthcare article without a touch of Levitty?

It is a fact universally acknowledged among healthcare reporters that there are two ways to structure an article.

The first is to give Kaiser's Larry Levitt the lead quote to articulate or validate an asserted trend.

The second is to use other authorities to assert said trend -- and deploy Levitt about two-thirds down to inject a note of skepticism or a reality check. Today offers a perfect specimen of plan b: Gaming Obamacare, by Politico's Paul Demko.  The thesis is brought to you by the nation's insurers:

Obamacare customers are gaming the system, buying coverage only after they find out they’re ill and need expensive care — a trend insurers warn is destabilizing the fledgling health law marketplaces and spiking premiums for everyone.

700 words in, we're well prepped for the Levitt Reality Check:

A little less underinsurance on HealthCare.gov this year

[1/11 update at bottom]

It looks as though takeup of Cost Sharing Reduction (CSR) subsidies by eligible buyers on HealthCare.gov is up slightly this open season, so far. CSR reduces deductibles, copays and maximum out-of-pocket costs for buyers with incomes below 250% of the Federal Poverty Level (FPL) -- but only if they select silver plans, the second-cheapest of four metal levels.

As of the end of open season for 2015 enrollment last February, 76.8% of CSR-eligible HealthCare.gov customers had selected silver plans and so accessed the benefit. For 2016 enrollees through 12/26/15, according to HHS's latest enrollment report, CSR takeup is up to 78.4% on the federal exchange.

Here's the basic calculation for CSR takeup among 2016 enrollees:

A More Affordable Care Act? Some states may make it so

I have a post up on healthinsurance.org about current and possible future state initiatives to sweeten the benefit pot (though it doesn't address the subsidy bump-ups provided by Massachusetts and Vermont).  Here's the first section:

Remember the public option? It was a linchpin of early Democratic health reform blueprints for what became the Affordable Care Act. The health insurance marketplace would be anchored by a government-run health plan that would work to keep costs low and make coverage as comprehensive as possible. Private insurers in the marketplace would have to compete against it.

The insurance industry lobbied hard against the public option, and the most conservative Democratic senators killed it. (Every Democratic vote was needed to pass the law, because Republicans rejected it en masse.)

When the ACA passed without a public option in 2010, some observers speculated that Congress might come back to establish one at a later point, if competition among private insurers proved a force too weak to keep coverage affordable. But that is clearly not going to happen on a national level with Republicans in control of Congress.

There is one way a public option could become a reality in fairly short order, however. The ACA didn’t create one market for health insurance, but rather 51 markets – one for each state plus the District of Columbia. And states have considerable freedom to shape their insurance markets, should they wish to seize it. “Nothing in the ACA stands in the way of a state creating a public option,” notes Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation.

ACA enrollment 2016: pool somewhat wealthier; silver selection holds steady

[See update at 5a and 5b: light on who's unsubsidized]

HHS released its midterm report on ACA private plan enrollment for 2016 today. A few observations:

1. While HHS was obviously lowballing when it published enrollment projections in October, enrollment has already hit the lower range of those projections. The targets were 11.0--14.1 million plan selections by Jan. 31, 2016, including 2.8--3.9 million new customers.  As of Dec. 26, all exchanges combined had just shy of 11.3 million enrollees, including 3.0 million new customers.

2. The enrollee pool in the 38 states using HealthCare.gov is slightly wealthier this year than last. For 2016 to date, 37% of hc.gov enrollees for whom income data is available have incomes in the 100-150% FPL range. As of the end of OEII last February, 40% were in that range.There have been proportionately more buyers with incomes over 250% FPL this season. The difference is probably due to new Medicaid expansions in Pennsylvania, Indiana and Alaska, which probably put a couple of hundred thousand private plan enrollees into Medicaid.

Trump promises to keep the vermin out

Brian Beutler, spotlighting the naked racism in Trump's disgusting ad, sensibly provides only a silent gif rather than giving the ad itself additional exposure:

A handful of observations about this image and the ad:

1.  The image, meant to evoke Mexican's storming the U.S. but actually showing migrants trying to enter a Spanish enclave in Morocco, was obviously selected to invoke invading hordes. But why the aerial view? The tiny swarming figures evoke more an infestation -- of vermin, or bacteria -- than a human endeavor.  As Alexander Hurst noted recently in Donald Trump and the Politics of Disgust, Trump is a germophobe who often expresses disgust with bodily fluids (sweat, urine, breast milk, menstrual blood) -- traits that correlate with xenophobia. His most grossly abusive statements and images connect with his base on a gut level. This image is his campaign in a gutshell.

ACA marketplace: What to watch for in 2016

Larry Levitt tweets core questions for the ACA private market in the coming year:

Key things to watch in health for 2016: 1. Health spending trend. 2. ACA premiums for 2017. 3. Further progress in covering the uninsured.

— Larry Levitt (@larry_levitt) December 31, 2015

That is, will marketplace plans prove affordable to a critical mass of people for whom the nongroup market is the only route to insurance? (The first question has a wider purview.) Regarding the viability of the marketplace, some further questions:

1) Whither narrow networks? For 2017, CMS has tightened the standards for network adequacy, inspiring intense squawking from the insurance industry. More constraint on insurers' ability to exclude expensive providers could put some upward pressure on providers. On the other hand...