• This is why we can’t have nice things

    In all the Iowa excitement of today, it’s entirely possible that Sarah Kliff’s excellent piece in yesterday’s WaPo will be missed. That’s a tragedy. It’s really important.

    I get that there are small government adherents who hate the ACA. I get you don’t like the exchanges, or the mandates, or regulations. But Consumer Health Assistance Programs?

    $2.8 million grant allowed the state to hire nine employees to staff a toll-free hotline. More than 6,000 Texans called in during the past year, seeking advice on how to find affordable coverage, or help filling out an insurance application, or fighting a denied claim. The new employees traversed the state, hosting more than 160 events aimed at making Texans — a quarter of whom lack insurance — more aware of coverage options.

    “The grant provided us with the opportunity to . . . actually take the 20 or 30 minutes, or however long, to help someone complete an application,” said Audrey Seldin, senior associate commissioner for consumer protection at the Texas Department of Insurance, which oversees the program.

    All these programs do is help people find insurance that already exists. If you want to look at it another way, it’s likely helping private insurance companies by finding them customers and helping them apply. It’s also helping people to fight for money they are owed, but being denied:

    Since the grant started, Maine Consumers for Affordable Care has netted consumers $23,000 in insurance appeals, with an additional $53,000 on the line in pending cases.

    “We haven’t lost one yet,” Mia Poliquin Pross, associate director of the Maine consumer assistance program, said of the claim denials her two attorneys have appealed. “We would really like to ramp up that portion of the work.”

    And, as Congress argues about billions (or even trillions), this program costs millions overall. Plus, it was putting people to work.

    So what’s the problem? Congress can’t pass a budget. Without a budget, people suffer. When do they come back to work again?


    • $2.6 million to help 6,000 people works out to $433 per phone call.

      6,000 phone calls per year, of “20-30 minutes” is 38.5-57.7 hours of phone time per week. With a staff of 9, that puts each person on the phone for 4.3-6.4 hours per week.

      What I’m saying here is, if your policy position is that government interventions can cost-effectively improve access to health insurance, maybe this isn’t the program to high-light.

    • Where is the data? Where is the evidence? Was this a cost effective program? $2.8M to hire 9 people? Six thousand phone calls, which per one of the advocates of the program were 20-30 minutes long. With 9 employees, that’s less than 3 calls per day per employee. Kliff’s piece says that the calls will now go to the general consumer assistance line at the department of insurance, and she asserts that they have less expertise in health insurance. Is there evidence that these employees are less capable of handling these calls? Maybe such evidence exists, but it certainly is not presented in that article. Could those people be trained to be just as effective handling those calls? How much would that cost, more or less than $2.8M?

      And as far as people being “owed” money, that is not necessarily the case simply because some claim appeals were ruled in their favor. I’ve been closely involved with state DOI insurance appeals. Evidence and proper interpretation of contracts are often ignored. I’ve seen appeals ruled in favor of a customer when the contract very unambiguously did not cover the treatment in question, because consumer boards like to stick it to the big bad insurer. I’ve had regulators tell me with a straight face that a particular case is not about applying the contract properly, but doing what “feels right”.

      I’m perfectly willing to accept that this could be a good program, but I’m not seeing any evidence here. Looks to me like a case of “this sounds like something good, so we should do it”, regardless of whether it is the right way to spend the money.

    • Those are fair points. Of course, we’ll never have the data, will we? It’s awfully convenient to say that there’s no evidence of good long-term outcomes when they really never get going, and no money can be allocated to measure impact.

      If there was a good study, and they were found to be wasteful, I’d be the first person to say that we should get rid of them.

    • One of the implications I took away from your piece on your experience with the two dying infants relates to the ACA.

      One of the factors that made a difference in the two cases was the accuracy of the information they were given. This lead directly into the second difference, which was the opportunity to use the information in a manner that was in accordance with their own values and preferences.

      In one case the experts with insider knowledge and authority failed to give them accurate information, presumed to know what their preferences would be, acted accordingly, and potentially made everyone involved dramatically worse off than they would have been otherwise and spent a ton of money doing so.

      In the second case, the experts with insider knowledge communicated the information to the patients and they were able to act in a manner that was consistent with their own subjective values and preferences, were able to make choices that left everyone better off than they would have been otherwise, and spent little or no money doing so.

      What does this have to do with the ACA? The ACA takes the already severe systemic problems with information transparency and control inherent in our medical system and worsens them.

      Give patients the information about the real costs of the medicine they wish to consume, the capacity to influence it through price transparency and competition, and the ability to chose both insurance and medical care that’s consistent with their own values and preferences and outcomes witnessed with the second set of parents are far more likely.

      Introduce legislation that permanently obscures critical information about the true costs of the care, transfer more control to centralized bureaucratic regimes staffed by experts who presume that they know what’s best for everyone in every situation and you get a system that’s structured to produce outcomes like the first family endured.

      Is a conversation between a doctor and patient about the pros and cons of a MRI that a doctor think is unwarranted more or less likely to occur when a patient is paying for it out of their own medical savings accounts? That’s the essential dynamic at play here and it’s this set of distorted incentives that the ACA worsens and makes permanent.

      • You mentioned the article about the two dying infants. I reread it and saw no indication that the difference had anything to do with price transparency or the real costs of care. I am sure there are cases where the skin the game argument, works but that doesn’t appear to be one of them. I’m okay with people having some skin in the game, but I am concerned about people who don’t have enough money to be in the game. ACA gives people more choices by making it possible for some people to purchase policies they otherwise couldn’t afford and takes some of those choices away by requiring minimum benefits and eliminating annual and lifetime caps.

        • @George:

          The point wasn’t necessarily price transparency, it was access to information (of which price is one piece), and the capacity to influence essential medical decisions.

          When patients have skin in the game, it forces both the doctors and the patients to consider both the costs and the benefits associated with particular treatments, to consider the alternatives, as well as their own values and preferences.

          In the first case, it would have forced the doctors caring for infant to have an immediate and frank discussion of the infant’s real condition in order to authorize the payment for care that they were about to provide.

          Compromising communications between physicians and patients is only one of many systematically important changes that transferring virtually all responsibility for payments onto third parties has had for medicine – virtually all of them costly and harmful.

          • @JayB

            There are many other factors that influence the doctor-patient communication, but I agree that in most cases greater skin in the game would lead to greater consideration of financial costs (as opposed to side effects). I know people who could serve as poster children for the skin in the game argument. But requiring too much skin in the game would also block access to care. Do you have an amount in mine

            • All I can say with confidence is that the percentage is greater than zero -as once you move beyond idealized models I think you’d find that the amount of cost sharing that induces meaningful communication and consideration of the costs and benefits would vary according to differences in both the disease condition and patient population that are difficult to model.

              IMO the only way to discover the optimal level of cost sharing would be to study it empirically under a regime where HSA contributions and insurance premiums get equal tax treatment and insurance providers are free to compete on this margin.

              Unfortunately, the high-mandate, low cost sharing monoculture that we’ll get via the ACA will make this impossible, and physicians will find themselves conscripted into covert-rationers acting on behalf of whatever third party is paying the bills.

    • Bit more thought on this: if 6,000 people acquired policies with premiums of $10,000/year (kind of average for family coverage…), the 2.8 million is about 4.6% of the generated premium, which is in line with broker’s commissions. Maybe the moral of the story is that the selling costs of medical insurance don’t change much, whether it’s public (CHAP) or private (insurance agents).

      Still, it dovetails with other over-estimates of demand in PPACA, such as the federal high risk pool.

    • I think one of the primary arguments of the “small government adherents” you criticize would be that the government often doesn’t figure out what works, they just write a law and start spending on money on stuff and whether or not it is cost-effective or even just plain old effective is an afterthought, which seems to be the case here. And then when people question whether or not we should be doing it one can say “What, you don’t want Consumer Health Assistance Programs? It’s helping people buy insurance!” or in other words, the health policy equivalent of “won’t somebody think about the children?”.

      There are stubborn and unreasonable opponents of PPACA who are not swayed by evidence, but the more reasonable critics of the bill have argued against just this type of thing, spending money on something that “feels good” without giving enough thought to the best and most cost-effective way to accomplish our goals. Is hiring a bunch of government employees to staff (and according to the statistics so far, likely over-staff) a consumer hotline really the best way to do this?

      • I get that there are stubborn and unreasonable people on both sides. Let’s assume you and I are not them and forget the straw men.

        I think this is a program that is relatively low cost, and could be productive. I don’t think it’s been given a chance to succeed. I think it’s showing promise. I’d like to give it a chance to succeed. Moreover, I think it could potentially shore up the private insurance market. I’ll say it again – if the program is given a chance and fails then I will wholeheartedly back its dissolution.

        But, simply because Congress can’t pass a budget, it will disappear. That’s all. That’s why we can’t have nice things.

        • If your problem with this is just that government dysfunction is disrupting a potentially good program, I agree. Many of our institutions, for reasons of both ideology and arcane procedural functions, prevent our public services from functioning well. We play charades every year because of the doc fix and the budgetary rules that surround fixing it. We can barely even attempt to address long-term budget issues because one side reflexively rejects even the consideration of any tax increases.

          But to me that just strengthens the argument of limiting the scope of Washington’s control over the health care system, because that dysfunction can kill potentially good programs, and makes it harder to fix or get rid of bad ones. While I’ve expressed skepticism about this particular program, I’m of course just speculating, and the idea goes both ways. Maybe this program would have been great (I used to design and analyze results of consumer intervention programs just like this for a private insurer, you throw stuff at the wall and see what works, sometimes spending money on seemingly good ideas that don’t pan out). It wasn’t shut down because it was cost-ineffective, it wasn’t shut down for lack of evidence, it was shutdown because of its reliance on the federal bureaucracy and budgeting process to keep it going.

          I’m totally with you and the very idea of this blog, we should use evidence and data to drive our decision making process, and I think the likelihood of doing so is diminished when we do more of it in Washington DC.

        • In fact, I’d say TX ought to pursue alternative funding and keep this going. They have tax revenue of $183B, this is a drop in the bucket of what they spend in a year. And funding the program themselves means they wouldn’t have to rely on the partisan shenanigans going on in Washington to keep it going while they evaluate how well it works. And then if it pans out other states would hopefully follow suit. And if it doesn’t it isn’t a part of federal law, it just goes on the scrap heap of failed experiments.