• Reading list

    Converting Medicare to Premium Support Would Likely Lead to Two-Tier Health Care System, by Paul N. Van de Water (Center on Budget and Policy Priorities)

    Secret Weapon: The “New” Medicare as a Route to Health Security, by Mark Schlesinger and Jacob S. Hacker (Journal of Health Politics, Policy and Law)

    Over the past twenty years, Medicare has been transformed from a single-payer insurer into a hybrid of complementary public and private insurance arrangements. Despite creating ongoing controversy, these changes have resulted in an ironic and largely overlooked strategic potential: Medicare’s evolving hybrid form makes it the most promising vehicle for overcoming the historical obstacles to universal health insurance in the United States. To make this surprising case, we first explore the distinctive political dynamics of programs that, like today’s Medicare, are hybrids of public and private arrangements. We then consider how these political dynamics might circumvent past barriers to universal health insurance. Finally, we discuss the strengths and weaknesses of alternative pathways through which Medicare could be expanded to promote health security.

    Requiem for the CLASS Act, by Howard Gleckman (Health Affairs)

    The demise of a national voluntary long-term care insurance program has left advocates uncertain where the political and financial support for a similar measure will come from in the future.

    How the Patient-Centered Outcomes Research Institute Can Best Influence Real-World Health Care Decision Making, by Alan M. Garber (Health Affairs)

    The Affordable Care Act of 2010 created the Patient-Centered Outcomes Research Institute to promote and fund comparative effectiveness research and to ensure that the product of this research improves real-world health care decisions. Notwithstanding limitations imposed by Congress on the institute’s ability to influence federal payers’ coverage and payment policies, the organization now has considerable potential to help standardize and coordinate comparative effectiveness research in the United States. Still, many questions remain about how this important new entity will function—and a central challenge will be to produce comparative effectiveness assessments that can be readily disseminated to, and used by, a wide range of health care stakeholders, especially providers and patients. I recommend that the institute adopt a comparative effectiveness assessment format that compares interventions on the basis of their clinical risks and benefits, economic considerations, and the insights they might offer into medical care. I also offer an example of how this proposed assessment and rating approach might work in the presentation of findings that weigh cardiac bypass versus angioplasty as alternatives for the treatment of coronary disease in which multiple coronary arteries require intervention.

    How Comparative Effectiveness Research Can Help Advance ‘Personalized Medicine’ in Cancer Treatment, by Scott D. Ramsey, David Veenstra, Sean R. Tunis, Louis Garrison, John J. Crowley and Laurence H. Baker (Health Affairs)

    The use of biomarkers to “personalize” cancer treatment—identifying discrete genes, proteins, or other indicators that can differentiate one type of cancer from another and enable the use of highly tailored therapies—offers tremendous potential for improved outcomes and lower treatment costs. However, the rapid development of cancer biomarker, or genomic, tests—combined with a paucity of evidence to support the effectiveness of the tests—presents a challenge for patients, clinicians, and other stakeholders. In this article we propose that comparative effectiveness research be used to strengthen what is now a haphazard process for developing and marketing cancer biomarker tests. We suggest novel funding approaches and a systematic process for moving from regulatory approval to the generation of evidence that meets the needs of stakeholders and, ultimately, patients.

    Chronic Disease and the Shifting Focus of Public Health: Is Prevention Still a Political Lightweight? by Rick Mayes  and. Thomas Oliver (Journal of Health Politics, Policy and Law)

    Why is it so politically difficult to obtain government investment in public health initiatives that are aimed at addressing chronic disease? This article examines the structural disadvantage faced by those who advocate for public health policies and practices to reduce chronic disease related to people’s unhealthy lifestyles and physical environments. It identifies common features that make it difficult to establish and maintain initiatives to prevent or reduce costly illness and physical suffering: (1) public health benefits are generally dispersed and delayed; (2) benefactors of public health are generally unknown and taken for granted; (3) the costs of many public health initiatives are concentrated and generate opposition from those who would pay them; and (4) public health often clashes with moral values or social norms. The article concludes by discussing the importance of a new paradigm, “health in all policies,” that targets the enormous health and economic burdens associated with chronic conditions and asserts a need for new policies, practices, and participation beyond the confines of traditional public health agencies and services.

    The Moral Standing of the Market, by Amartya Sen (Social Philosophy and Policy)

    How valuable is the market mechanism for practical morality? What is its moral standing? We can scarcely doubt that as individuals we do value tremendously the opportunity of using markets. Indeed, without access to markets most of us would perish, since we don’t typically produce the things that we need to survive. If we could somehow survive without using markets at all, our quality of life would be rather abysmal. It is natural to feel that an institution that is so crucial to our well-being must be valuable. And since moral evaluation can hardly be indifferent to our interests and their fulfillment, it might appear that there is nothing much to discuss here. The market’s moral standing “has to be” high.

    The powers and pitfalls of payment for performance, by Alan Maynard (Health Economics)

    The developmental origins of health, by James J. Heckman (Health Economics)

    The Constitutionality of the ACA’s Medicaid-Expansion Mandate, by Glenn Cohen and James F. Blumstein (The New England Journal of Medicine)

    Drug Shortages – A Critical Challenge for the Generic-Drug Market, by Bruce A. Chabner (The New England Journal of Medicine)

  • TIE in Australia

    For the next week, I’ll be in Australia, giving talks on tobacco, trade and public health at ANU and U Melbourne.  I’ll also be give a separate talk at ANU on the legal ecology of resistance.  Any Aussie TIE readers are welcome to attend.

    I’m also happy to bleg for food tips, especially on the drive from Canberra to Melbourne.

  • The standard of safety

    In defending the Plan B decision yesterday, President Obama said the following:

    “And as I understand it, the reason Kathleen made this decision was she could not be confident that a 10-year-old or an 11-year-old, going to a drugstore, should be able, alongside bubble gum or batteries, be able to buy a medication that potentially if not used properly could end up having an adverse effect,” Obama said. “And I think most parents would probably feel the same way.”

    So let’s examine that statement. It seems pretty reasonable on its face. Sure, the FDA may have evidence that the drug, when used properly, is safe and effective. But how can we be assured that adolescents will not go crazy and start popping Plan B like candy. If only someone had studied that possibility.

    If only the administration had read their FDA commissioner’s statement:

    The Center for Drug Evaluation and Research (CDER) completed its review of the Plan B One-Step application and laid out its scientific determination. CDER carefully considered whether younger females were able to understand how to use Plan B One-Step.  Based on the information submitted to the agency, CDER determined that the product was safe and effective in adolescent females, that adolescent females understood the product was not for routine use, and that the product would not protect them against sexually transmitted diseases. Additionally, the data supported a finding that adolescent females could use Plan B One-Step properly without the intervention of a healthcare provider.

    See, as part of the review process for making a drug over the counter, the CDER specifically investigates whether that would be a problem. They study whether patients can understand how to use the drug properly without a healthcare provider being involved. They check if patients understand the labeling. They examine whether patients understand how often to take it. And, in this case, the CDER did all of this with adolescent girls.

    If Secretary Sebelius, and President Obama, feel that this CDER review was improperly done, they should say so. If they feel the investigation was flawed, or incomplete, it is up to them to explain why. But in their response, they seem to be pretending that it never occurred.

    Moreover, this is the process by which all over-the-counter drugs are approved. All drugs, when improperly used, carry significant effects. In 2009, there were over 70,000 calls to poison control centers for concerns about acetaminophen and more than 88,000 for ibuprofen. More than 30,000 calls were made for diphenhydramine, and 4 of those cases resulted in deaths. Just looking at kids 5 years of age and under, there were more than 130,000 calls for analgesics, 53,000 for vitamins, 48,000 for antihistamines, and 45,000 for cough and cold preparations. And yet, no one seems to be too concerned that these medications could be purchased “alongside bubble gum and batteries”. And, for the record, battery ingestions killed 4 kids in that age group that year.

    All drugs are potentially dangerous. I don’t think that 11 year olds should be buying Tylenol, or Ibuprofen, or Benadryl any more than I think they should be buying Plan B. Maybe we should set age limits for the purchase of all over-the-counter drugs; but we don’t do that. We have set rules as to what is considered safe for over-the-counter sales, and we have determined that the societal good of having those drugs available without a prescription outweighs the very real and known harms that they pose. If the current administration is going to take the unprecedented step of over-ruling the FDA for this one drug, I would hope that they have a compelling reason to believe that it is more dangerous than all those that came before it. I would hope they have some data behind them.

    Otherwise, this administration is letting politics trump science. And while it may make campaigning in some ways easier next year, it will remove a significant amount of credibility that they are the ones who will shield science from politics.


  • Reflex: December 9, 2011

    Plan B decision draws strong and mixed reaction, reports Anne E. Kornblut and N.C. Aizenman. “President Obama on Thursday defended his administration’s decision to block unrestricted sales of the morning-after pill as a “common-sense” parenting choice, even as women’s rights advocates condemned it as a cynical move that could provoke a damaging political backlash for the president next year.” Aaron’s Comment: My thoughts on this decision yesterday.

    Federal judge halts changes to N.C. Medicaid, writes Lynn Bonner. The state Division of Medical Assistance had proposed to limit personal care services delivered via home health to elderly and disabled persons. Don’s commentThe proposed policy would limit home health services to persons with limitations in 3 Activities of Daily living (eating, dressing, toileting, bathing, etc) instead of the existing policy of 2. Several groups sued and the judge blocked the change. The policy was a small part of an overall $50 Million cost saving plan; 2,000-3,000 persons are affected by the ruling. This was a previous decision and is separate from the issue mentioned yesterday in reflex.

  • Caregivers as bad advocates

    Howard Gleckman has an interesting post wondering why the 40-60 Million caregivers (those providing informal, unpaid care to loved ones dealing with disability) are such bad advocates, especially the subset that are caring for the elderly (most typically their parents). Howard discusses his participation in a recent caregiving forum, and upon reflection notes the following as the biggest barrier to effective advocacy on behalf of caregivers:

    It is different for those caring for elderly parents or spouses. They often have no network of support. They have no free time. And their caregiving experience is often time-limited. It may last a few months or a few years. Rarely, it will last five years or more.

    Most important, it ends with death. Every time. And when it is over, caregivers often want to put the experience behind them. The last thing most want to do is relive it for some politician.

    People my age and younger will be more affected by caregiving for our parents than any generation(s) before us, simply because there are fewer of us per parent. The fact that a large number of persons cycle predictably into this role and are affected by it, but there is little response to it strikes me as a learning problem of sorts. You may only do it once, but others will follow. It is unclear how to change this, but it is just as crucial to figure out how we will informally care for the baby boomers as it is to figure out how we will finance their Medicare.

    An exchange with Austin last night helps to illustrate the learning model problem of improving how we care for loved ones (once you are finished with that phase of life, you seem to move on and forget about it). He read a draft of this post and sent me a link to this post he wrote nearly two years ago about day care/child care/pre-school costs–both explicit money flows as well as hassle, anxiety and worry. My kids are now 11, 14 and 16, so the difficulty of the phase of life that he writes about had faded vaguely away for me, and with my memory, any impetus for organization and action that I may have had. He tweeted last night that he doesn’t even think about these issues less than two years later. Interesting parallels.


  • Premium support proposal and critique: Proposal

    This post is part of a series. If you haven’t read the prior posts in the series, you really should. The introduction explains what I’m doing and links to all posts to date. This post is a proposal for a specific type of Medicare premium support program. I will answer questions about it and critique it later in the series.

    Any premium support that satisfies the goals listed at the end of last post must have the following specific features.

    Inclusion of private plans and a public option (traditional Medicare, TM). There is no reason to exclude TM from a premium support program. The whole point is for many plans to compete (in a sense defined below). TM has many features that make it an attractive player in a competitive market. By virtue of its large market share today (75% of beneficiaries) in some markets it can set prices below those of all private plans without alienating very many providers. (In others, some private plans obtain lower prices.) That translates into relatively lower taxpayer cost and cost growth, a virtue that should be maintained. Hereafter, unless otherwise specified, “plan” means either TM or a private plan. In other words, TM is “just” another plan. (Further reading related to these points here and here.)

    All plans must provide at least the standard TM benefit. Plans may innovate within whatever set of boundaries deemed sensible (I’m not defining them here), but must at least provide the standard TM benefit. Plans may offer additional benefits beyond the minimum standard. That benefit standard must include some notion of network adequacy. Plans can’t set payments so low so as to exclude too many providers. This holds for TM as well. Note that this puts a constraint on how low prices can go for any plan. Requiring all plans to meet one minimum standard maximizes beneficiaries’ ability to meaningfully compare plans. (Further reading on this point here and here.)

    Replace the current set of arbitrary premium support levels for TM and MA with a competitive bidding system. It’s important to recognize that we have a type of premium support today. I know of nobody who can say very many good things about it. In contrast to the administered pricing system that exists today, the level of premium support should instead be set, market-by-market, by some function of bids submitted by TM and private plans (e.g. minimum bid, second lowest, average). It’s simplest to think of the support level set at the minimum bid, but that’s not an absolute necessity. Setting it at the minimum bid protects taxpayers from overpaying for benefits, as some think they do today for MA plans and others think they do for TM. Setting support at a market, rather than national, level (i.e. tying it to the lowest bid locally, not nationally) accounts for geographic variation in health care costs.

    Bids reflect the plan’s cost of providing the standard TM benefit. Note that under any version of this bidding system, there is at least one plan that is as at least as affordable to beneficiaries as is TM today, however that plan may not be TM in all markets. Plans that cost more than the minimum bid or offer benefits richer than TM must charge beneficiaries a premium for that additional cost or coverage. Thus, inefficient plans suffer in the marketplace. Benefits that are of value to beneficiaries are likely to be offered even if they are not available from TM. However, beneficiaries would pay out of pocket for additional benefits. If this is considered unfair to beneficiaries or to TM then it suggests that the minimum benefit should be enriched. This brings front and center a debate about what the minimum benefits of Medicare should be, a stark contrast to the arbitrary variation of benefits available through MA today and the slow-to-update set of benefits available through TM. (More on these points here.)

    Provide low income subsidies. No beneficiary should be unable to obtain coverage for necessary health care due to income. Thus, the level of premium support should vary by income so that lower income beneficiaries can afford the coverage they need.

    Risk adjust premium support. Plans that enroll beneficiaries of higher (or lower) health risk should not be penalized (rewarded) for doing so. Hence, premium support should be risk adjusted. There is great concern among many that risk adjustment will be insufficient to prevent private plans from cream skimming. This is a serious and legitimate issue to which I will return later in the series. Whatever body oversees the program should use every tool necessary to address it including all manner of prospective and retrospective risk adjustment, risk corridors, risk sharing, reinsurance, auditing to check that plans’ actual costs are within reasonable bounds of risk-adjusted payment, etc. Plans found to be gaming the system on selection should be ejected from the program.

    Additionally, greater transparency should be required of private plans. The same level of information about utilization that is available from TM for the beneficiaries it covers should be made available by private plans. Researchers should have access to those data to they can independently check performance of the program, including analyses of selection (with all due privacy protections, of course). If a plan is receiving public funds, as they all would, the data that documents the use of those funds should be just as public as that of TM.

    TM must be afforded flexibility. Because it is governed by Congress to a larger extent than private plans, TM is unable to innovate in the same ways private plans can. This is unfair and unnecessary. TM should be liberated from such constraints and shielded from politics. The IPAB is a good model and something like it should govern TM, if not the entire premium support program. Moreover, all other provider payment reforms embodied in the ACA and any future ones dreamed up by the IPAB should be permitted to go forward. Despite what many pundits claim, those payment reforms are not the antithesis of a competitive program. That’s a false distinction. They are what will help TM be a competitive, cost efficient plan, one that could give private plans a run for their money. That should be encouraged. (More on these points here.)


  • I like this sentence

    (A Cowen-esque post because, as does so much of his blogging style, it works.)

    Just as better brakes on a train or car enable it to travel safely at higher speeds, so may constitutional limitations increase the power potentially available to a state in its hour of crisis.

    — Paul Starr, The Creation of the Media (page 11)

    UPDATE: I was very tired when I wrote this short post. It had a lot of typos.

  • On The Record (with daily recap)

    • CBO: Report on federal budget deficit during first months of FY 2012
    • Mathematica: MPR launches new working paper series
    • RWJF: Do students who are more active do better in school?

    Today in TIE: Reflex, Austin intros a series on premium support, and notes that Gov. Romney is keeping his options open on that issue, Don updates on teaching about the individual mandate, Aaron looks for Plan C on the FDA over-the-counter-morning-after pill controversy, and he is having trouble finding the words a lot this week, this time per Sen. Santorum’s take on the individual mandate, while Kevin rocks it out in the NEJM on the First Amendment and smoking


  • Drug shortages and Medicare’s price controls

    In the US, there is currently a shortage of many injectable, generic drugs, and it is affecting patient care. There are many reasons why this might be happening, and I will focus on just one in this post.

    Atop a post on this subject yesterday, Julian Pecquet’s headline read, “Hatch blames government price controls for shortages of medical drugs.”

    “Experts contend that federal government pricing and rebate programs are a significant contributing factor to the current drug shortage crisis,” Sen. Orrin Hatch (R-Utah) said during a committee hearing on the issue. “Current pricing structures have been very effective at driving generic utilization. However, they may not fully capture or reward the costs associated with the complex development and manufacturing of injectables, as opposed to the more straightforward manufacturing process in the pill market.”

    In what sense is this “price control” and not just garden variety low government payment rates? After all, if the government sets a low payment rate for a medical service or product, that does not mean that the provider or manufacturer can’t charge others a different and higher price. Where’s the “control”? Bruce Chabner, in NEJM, explains.

    Currently, Medicare legislation resets reimbursement for injectable generics at no more than 6% above the average sales price (ASP) paid during the preceding quarter for any given agent.3 These limits affect price and reimbursement for all purchasers and providers, result in little profit for the manufacturer and the provider in the U.S. market, and greatly limit the ability of generic-drug manufacturers to increase their prices. Meanwhile, generic drugs manufactured in the United States can be sold abroad for a greater profit. (Emphasis mine.)

    I followed the referenced link, but that didn’t provide much help in understanding why Medicare’s reimbursements “affect price and reimbursement for all purchasers and providers.” Here I plead ignorance and ask readers for help. It’s clear that Medicare’s low reimbursement rate could limit availability of drugs for Medicare beneficiaries. But that’s not how the problem is characterized. It’s characterized as a widespread shortage. If that’s due, in part, to Medicare “price controls” how does the low Medicare price “control” that of other insurers? Why can’t insurers pay whatever (higher) price is necessary to incentivize manufacture of the drugs? Medicare pays low prices for a lot of things, but that doesn’t cause a shortage of them for those of us not on Medicare. What am I missing?


  • We’re #1?

    From Healthwatch:

    Politicians love to claim the U.S. has “the best healthcare system in the world,” though experts argue otherwise.

    But a new index that purports to measure a nation’s prosperity — not just wealth, but health, personal freedom and other measures — concludes that lawmakers might be on to something.

    After crunching the World Bank’s world development indicators and survey data from the 2010 Gallup World Poll, the London-based nonprofit Legatum Institute concludes that the U.S. in 10th overall for prosperity — but first for health.

    I did a two-week series on the quality of the US health care system, so you can imagine I was interested in the results.

    The “study” was done by the Legatum Institute, a non-partisan institute that nonetheless seems to have the tagline, “Free Markets, Free Minds, Free Peoples”. The methods of the analysis are a bit vague. But here’s what I can figure out:

    The Health sub-index assesses countries by outcomes that are made possible by a strong health infrastructure, such as rates of immunisation against diseases and public health expenditure. Countries are also assessed on outcomes such as life expectancy, rates of infant mortality and undernourishment. The sub-index also includes measures of satisfaction with personal health and the health effects of environmental factors such as water and air quality, and even environmental beauty.

    As you can imagine, we do pretty meh in things like life expectancy and infant mortality (I can’t speak to variables like “environmental beauty”). But don’t take my word for it. Here are the results (emphasis mine):

    US citizens have a life expectancy of 70 years, when adjusted for healthy years lived, which ranks the country 27th, on this variable. Below average rates of infant mortality and undernourishment rank the United States 36th and fourth, respectively. Government health expenditure per capita is the highest in the world; this high level of spending, however, results in only average provision of hospital beds, but above average rates of immunisation for infectious diseases and measles, and the world’s second lowest incidence of tuberculosis. It also means that the entire US population has access to improved sanitation facilities. However, the US places 60th for its comparatively high incidence of respiratory disease. In 2010, around 90%* of respondents were satisfied with the quality of water in their area. Public perceptions of health vary; while 86%* of the population was content with their personal health in 2010, an above average 33%* had felt worried for a significant amount of the day before being surveyed. Perhaps consequently, the United States ranks 50th with regard to the share of the population that feels well-rested. However, the fact that only 21%* reported debilitating health problems in 2010 indicates a more positive situation. Also, a high level of satisfaction with the beauty of the immediate environment places the United States 20th*, on this variable

    So how do you get to #1? Well, check out the variables and weights applied to them. It seems that one of the variables included in the analyses was expenditure on health. As you can imagine the United States is clearly going to win that one. But I’m not sure why that would be a variable to measure “health”. If I’m reading the weights correctly, they also made health expenditure count more than infant mortality, life expectancy, undernourishment, water quality, sanitation, and deaths from respiratory disease (where we were 60th, remember). They also included things like “satisfaction with environmental beauty”, and if I’m again reading the weights correctly, they made that variable more important than any of the basic health outcome or infrastructure variables in the “Wellbeing” category.

    My favorite part of the Healthwatch piece is this, though:

    So, why didn’t France, the leader in healthcare rankings by the World Health Organization because of its universal healthcare system and top-notch prevention efforts, end up 7th?

    Thirty percent of French people “report feeling worried during the previous day, well above the global average,” the index reports. And despite the 35-hour work week, “a relatively low 67 percent reported being well-rested.”

    So France was 7th because 30% of people were worried during the previous day (except for the fact that 33% of US people felt that way) and because only 67% of people were well-rested (except for the fact that only 50% of people in the US felt that way). In other words, when trying to defend this odd outcome, the two examples the Healthwatch reporter chose were ones where we still performed worse than France.

    And yet, we were #1. Color me skeptical.