The House of Representatives passed a bipartisan health care bill on Saturday (!) on a voice vote. H.R. 3204 was introduced by House Energy & Commerce Chair Fred Upton (R-MI 06) and co-sponsored by leading Democrats Dingell and Waxman. A companion bill awaits in the Senate. This bill might be on the President’s desk in no time and he will sign it. Who said Congress can’t get things done?
Of course your next question is – what have they done? We get three Acts of Congress for the price of one.
The Drug Quality and Security Act includes two subsidiary acts, the Compounding Quality Act and the Drug Supply Chain Security Act. The CQA creating an intermediate license safe harbor for large-scale drug compounding (called “outsourcing” in the bill). This is a tardy response to the NECC compounding tragedy from slightly more than a year ago. (TIE background here).
The DSCSA requires paper or electronic pedigrees on US drugs, strengthening the drug supply chain against diverted, stolen and counterfeited drugs. This is by far the largest part of the bill, with very little recent media scrutiny on this bill text. Congress has tried to pass a pedigree bill for many years. The US is the world’s largest market for high-priced drugs, which certainly attracts the attention of counterfeiters. You may be shocked to know that the government does not surveil our drug distribution network to check for counterfeit product.
No CRS summary is available yet (at least not on Thomas).
The following is a guest post by Nicholas Bagley, University of Michigan Assistant Professor of Law.
So here’s a sad story about medicine and the law. Sarah Mulcahy was 96 years old when she suffered a bad fall. The pain was so severe that she became incontinent and nauseous. After going to the emergency room, she was hospitalized and spent three nights at Manchester Memorial Hospital in Connecticut. While there, she was X-rayed, CT scanned, hooked up to an IV, treated with an incentive spirometer, and given compression cuffs to prevent deep vein thrombosis. After being discharged, she went to a skilled nursing facility (SNF) to recuperate. She stayed there for more than three months at a price tag of about $30,000.
Fortunately, Medicare covers the costs of SNF care for patients who first spend at least three days as a hospital inpatient. (This is known in the lingo as the “three-midnight rule.”) Unfortunately for Ms. Mulcahy, however, she was never technically admitted as an inpatient to Manchester Memorial. Instead, the hospital had put her on “observation status,” an ill-defined halfway house for a patient who’s too sick to go home but who might not be sick enough to need the full range of hospital services. Because Ms. Mulcahy wasn’t ever an inpatient, Medicare wouldn’t cover her subsequent SNF stay.
From Ms. Mulcahy’s perspective, this was perverse. Observation status or not, she was in fact admitted to the hospital for three days. What basis could Medicare possibly have for saying she was never an inpatient? So Ms. Mulcahy, together with a bunch of elderly people with the same sort of problem, sued the Centers for Medicare and Medicaid Services (CMS).
This past Monday, a district court in Connecticut issued a careful opinion dismissing the case. In the court’s view, CMS was perfectly within its rights to defer to the hospital’s judgment about whether Ms. Mulcahy had been admitted. If Manchester Memorial said she was on observation status, well, she wasn’t an inpatient. And if she was never an inpatient, then the Medicare statute says the program can’t pay for her stint at the SNF. Q.E.D.
Strictly as a legal matter, this is probably right. When it comes to dispensing government money, Medicare defers left and right to the medical judgments of physicians and hospitals. That said, it bears noting that hospitals have unusually wide discretion in choosing whether to assign a patient to observation status. That’s particularly so because a patient’s technical status won’t much affect the sort of care she receives. At the margins—and maybe more than at the margins—financial incentives will shape how hospitals exercise that discretion.
The bad news for Ms. Mulcahy is that financial incentives have recently been pushing hospitals to put more and more patients on observation status. In one of its perennial efforts to weed out waste and fraud in the Medicare program, Congress in 2006 called on CMS to hire Recovery Audit Contractors (RACs) to police Medicare billing. Since then, the RACs have focused considerable attention on short-term hospital inpatient admissions that could perhaps have been treated on an outpatient basis. A hospital concerned about RAC scrutiny might well prefer to err on the side of caution by putting a borderline patient on observation status (technically an outpatient designation).
CMS has recently issued regulations to reduce the prevalence of extended, inappropriate observation care. There’s some debate about whether those regulations will work, but in any event, they’re not much consolation to Ms. Mulcahy. No matter how you cut it, she got screwed. (That’s the technical legal term.) But it’s important to see that Ms. Mulcahy got screwed not just because CMS deferred to the hospital’s judgment not to classify her as an inpatient. She got screwed because Congress made SNF payments contingent upon spending three days in a hospital. Why on earth did it do such a thing? If Ms. Mulcahy needed care at a skilled nursing facility, she needed care at a skilled nursing facility. Whether she’d just been discharged from the hospital is irrelevant.
The case serves as a reminder of the unintended consequences—consequences that still matter today—of the decision almost fifty years ago to model Medicare on the employer-sponsored indemnity insurance plans then offered through Blue Cross and Blue Shield. These plans were designed to help workers back onto their feet after an acute illness, not to support those with chronic, debilitating conditions. That’s why Medicare doesn’t cover round-the-clock nursing care for the elderly (we leave that to Medicaid once Ms. Mulcahy paupers herself). Yet it’s precisely these sorts of chronic conditions that disproportionately afflict the elderly. There’s thus a mismatch, reflected here and elsewhere in Medicare, between the needs of the patients who depend on the program and the type of care that Medicare will cover. Poor Ms. Mulcahy just got caught in a bureaucratic snare arising out of one of those mismatches.
I’m excited to announce my involvement in a new YouTube channel, Healthcare Triage. It’s going to be an ongoing series about health care, research, and policy. The topics will all be of significant interest to readers of TIE. In fact, you’ll probably recognize many of them from past posts. But now they’ll be even more accessible! I can’t wait to do the episode on survival rates versus mortality rates.
I’m getting to work with some amazingly talented people:
Not only that, the videos are going to be pretty fun. John Green will stop in regularly to have his hypochondria soothed by Aaron’s clear and engaging explanations. Healthcare Triage is made by the people who make Crash Course, mental_floss video, and The Art Assignment.
You probably remember John Green from this post. That video of his now has more than 3.7 million views! If you don’t know what Crash Course is, you’re missing out on something special. Mental Floss is similarly awesome. I’m sure The Art Assignment is going to be a winner, too.
But back to my channel! The “pilot” episode was just posted, right in time for October 1:
If you want to see more like this, we need your support. Please subscribe to the channel! You can also follow the show on Twitter at @HCTriage. I’d also appreciate your spreading the word through social media, email, etc. This has the potential to bring our love of research and policy to a much larger audience!
Yeah, I know. The government is set to shut down on Tuesday—by non-coincidence the very day health insurance exchanges open for business for ObamaCare. And I’m about to talk about hospital parking?
Bear with me. This is actually an important issue: The incredible way our health system so terribly disserves families caring for loved-ones with serious illnesses.
Today’s Chicago Tribune includes a front-page feel-good story about a new charity’s efforts to making parking free for families with babies receiving neonatal intensive care. The Tribune story notes: “Foundation will cover garage or mass transit costs for parents of critically ill infants.” It begins with a poignant description:
Wide-eyed Brody Rubenstein, connected to tubes and swaddled in a striped hospital blanket, was born 19 days ago with a hole in his diaphragm and many of his tiny organs pushed upward into his chest.
His parents, Neil and Amy, have spent nearly every day at his side, and added to their many worries is this: the cost of parking their car across the street from Lurie Children’s Hospital of Chicago. They’ve already spent about $250.
But starting Monday, the cost of parking will no longer be a concern. The Rubensteins and other families with babies in the neonatal intensive care unit will be handed passes for parking or public transportation that will allow them to come and go for free.
The Jackson Chance Foundation is stepping in to help. This worthy organization has raised $200,000 to help NICU families with free parking and transit passes. It’s a terrific cause. Yet it’s revealing and pathetic that such efforts are even needed.
The average daily cost of NICU care in the United States exceeds $3,000. I’m going to go out on a limb and guess that Lurie Children’s hospital –one of the nation’s most prestigious—charges even more. The Tribune reports that the average length of stay in Lurie’s NICU is 27 days. So average expenditures are nearing $100,000. If these infants need MRI scans, intricate procedures and tests, they will get these costly services. NICUs are wonderful places. Showpieces of modern medicine, these are responsible for a marked reduction of infant mortality.
And herein lays the irony. Alongside these medical miracles, we struggle to find $20 per day so families going through incredible difficulties have a place to park. And that’s only parking.
I’ve worked with Ronald McDonald House, which happens to have outstanding facilities in Chicago serving Lurie Children’s, the University of Chicago, and other area hospitals. RMHC does a great service for families of critically-ill infants and children. These families often come a long way for specialty care. Families need a place to stay, somewhere to eat so they aren’t spending surprising amounts of money in the hospital cafeteria. They need a place for sanity and sleep when a child has cancer, cardiac problems, or other serious illnesses. RMHC facilities do a great job, though the need is greater than they can fully address.
Notice something else, too. Charities such as Jackson Chance Foundation and RMHC are worthy ventures for families of cute and cuddly kids. But what about the hundreds of thousands of adults with cancer or serious cardiac disease? What about their families?
As I’ve noted here, my father was recently sick with a scary cancer. We spent thousands of dollars on hotel rooms, food, laundry, transportation, and more, as we managed the logistics of being there as a family to help with his care. He got excellent and humane care, and these expenses were not a serious hardship for us. They certainly would have been for many other Americans.
Our health care system—particularly our leading academic medical centers—often do a great job providing expensive, high-tech medicine. These same institutions and the wider health care and social service system do a horrible job addressing the economic, logistical, and other life challenges that predictably confront patients and their families given the practical realities of serious illness. (I’m not even considering even more challenging situations, such as indigent patients with HIV or other ailments who require costly emergency department visits and costly nursing home services made worse by their lack of much-less-costly secure housing.)
I’m glad that families such as the Rubensteins can get free parking. It’s pathetic that they even need to ask. It’s a depressing commentary that this obvious bit of humanity merits a newspaper headline.
I’ve been on the road, reading various depressing polemics on potential “rate shock” facing young adults who are now uninsured or buying coverage on the non-group market. If the typical newspaper reader understood that less than 14% of adults age 21-27 in this group would actually face the full unsubsidized cost of coverage in the new exchanges, we could waste less of our time on an absurdly-framed debate. I was all set to write yet another column by a liberal policy-wonk excoriating Avik Roy for his columns trying to establish that a relatively cherry-picked subgroup of healthy, relatively-affluent young adults will get hammered by health reform.
Then I just stopped.
We’re just past the point of partisan thrust and parry. Young adults will explore their options. Either they will have a positive experience with the new health insurance exchanges, or they won’t. Fifty-year-olds and 62-year-olds with diabetes will do the same. On the whole, I believe people will have positive experiences. Premiums on the new exchanges are reasonable, coming in below CBO expectations, and certainly below critics’ worst predictions.
I suspect the worst backlash won’t actually come from uninsured or under-insured people who actually buy coverage on the new exchanges. Backlash will come from people with pretty crummy jobs who hear that their hours are cut back. Backlash will come from people with limited employer-based coverage who face higher premiums or encounter other changes such as disliked wellness provisions. Some will look across the fence at decent plans on the new exchanges, only to discover that they can’t receive subsidies if they spurn their employer’s coverage.
Thousands of employers will blame “ObamaCare” for whatever unpopular moves they impose their workers. It’s the obvious play. In many cases, this blame will be mostly or entirely misplaced. Other times, the blame will be justified, reflecting glitches or unintended consequences of the new law. Either way, many workers will believe what their employers tell them. Millions of workers with relatively modest incomes will see their lives getting a little worse when they were hoping that health reform would make their lives a little better. Other people—I suspect many more—will see their lives getting a little or a lot better. Some of the most deserving people will seek benefits and medical care–only to discover that no help is forthcoming because their states rejected Medicaid expansion. Republicans had better hope that this is a disorganized and politically marginal group.
At long last, we’re nearing put-up or shut-up time for the new law. ACA’s political fortunes will rest on whether it tangibly improves peoples’ lives. If it does that, the politics will take care of itself. If it doesn’t, Republicans won’t need Avik’s columns or anyone else’s to knock it down.
Austin and Aaron are participants in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.
09/30/2013
Kevin Outterson
