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Category: Health Policy

The Truth About Medicare Advantage Saving Medicare

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BY GEORGE HALVORSON

We know from the current annual report from the Medicare trustees that Medicare Advantage is saving Medicare, and that Medicare will be a much stronger program as Medicare Advantage continues to grow.

When we look at actual numbers from that report, we see that Medicare Advantage cost Medicare $403.3bn last year.

The report shows that Medicare is growing 6.7% each year in total revenue. We see that Medicare Parts A and B have expense growth that slightly exceeds 8%, and that Medicare Advantage is projected to have expense growth of 4.2% for the year.

That means we’re losing money from the fee-for-service part of the Medicaid program — and that is eating into the Medicare trust fund. We also can see that Medicare Advantage is making a surplus for Medicare, and is increasing the size of the fund.

We know that Medicare Advantage bids against the average cost of Medicare in every county to create the capitation levels for each year. Those bids are typically discounted by 15% (or more) from the average Medicare cost.

Those discounted bids cost Medicare less in actual dollars each month. The Medicare Advantage critics speculate about coding levels for the plans, but the Medicare trust fund doesn’t care about codes.

They only care about actual dollars. When you look at actual dollars, we see that Medicare spent $403.3bn to pay for the coverage with Medicare Advantage plans.

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Revisualizing and Recoding Healthcare

BY KIM BELLARD

Two new books have me thinking about healthcare, although neither is about healthcare and, I must admit, neither of which I’ve yet read. But both appear to be full of ideas that strike me as directly relevant to the mess we call our healthcare system.  

The books are Atlas of the Senseable City, by Antoine Picon and Carlo Ratti, and Recoding America: Why Government Is Failing in the Digital Age and How We Can Do Better, by Jennifer Pahlka.  

Dr. Picon is a professor at The Harvard Graduate School of Design, and Professor Ratti is head of MIT’s Senseable Lab. Drawing on the Lab’s work, they write: “We hope to reveal here an urban landscape of not just spaces and objects, but also motion, connection, circulation, and experience.” I.e. dynamic maps. Traffic, weather, people’s moment-by-moment decisions all change how a city moves and works in real time.

Dr. Picon says. 

These maps are a new way to apprehend the city, They’re no longer static. Maps provide a way to visualize information. They’re crucial to diagnosing problems. I think they provide a new depth…It’s a little bit like the discovery of the X-ray. You can see things within cities that were not previously accessible. You don’t see everything, but you see things you were not able to see before.

So I wondered: what would a dynamic map of our healthcare system look like?  

I’m telling you, just a map of what happens between drug companies, PBMs, health plans, pharmacies, and patients would open people’s eyes to that particular insanity in our healthcare system.  Now repeat for the millions of other ecosystems in our healthcare system.  If that kind of dynamic mapping — showing all the complexities, bottlenecks, circuitous routes, and redundancies within the system — wouldn’t lead to health care reform, I don’t know what would.

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As Health Professionals Go, So Goes Our Democracy

By MIKE MAGEE

Last weekend’s New York Times headline, The Moral Crisis of America’s Doctors, spotlights that there is growing concern that the monetarization and corporatization of nursing and medical professions by hospital and insurance power houses, have seriously undermined the mental health and ethical effectiveness of health care professionals. The pandemic has only heightened the crisis.

Since focusing on the social science of Medicine in the 1990’s in Philadelphia, it has been an uphill battle to convince leaders in and out of Medicine that doctors and nurses are critical to individual and societal success. Recently, I’ve come to the conclusion that this may have more to do with a general lack of knowledge of our form of governing, democracy, than a misunderstanding of the stabilizing effect of professional doctors and nurses.

What is democracy? For an answer I turned to John J. Patrick PhD, professor emeritus in history, civics and government at the Indiana University. In his “Understanding Democracy,” he explains that democracy as we know it is a “startling new development.” The practice of rule (krater) by the people (demos), or “demokratia,” dates back 2500 years to Athens, Greece. Citizens did rule by majority vote, but only free males of Greek descent could rise to the status of “citizen.” In those days, individual freedoms took a back seat to unconditional support of the city-community.

Establishing a modern democracy in America has been a bit of a struggle.

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MA for Tomorrow: Moving Beyond the Status Quo to Advance Concrete Policy Changes for the Future of Medicare Advantage

BY CECI CONNOLLY AND MICHAEL BAGEL

Medicare Advantage (MA) has passed the tipping point, delivering coverage and care to more than half of the senior population in the US. The Congressional Budget Office projects more than 60 percent of people 65 years and older will be in the program by 2030. As enrollment soars and interest in value-based health care grows, it is imperative policymakers modernize the program that is expected to cost $7.5 trillion over the next decade.

Rather than taking the standard Washington posture of declaring victory or defending the status quo, our provider-aligned, nonprofit member plans spent nearly two years developing a detailed vision for MA for Tomorrow. The policy proposals being released at a Capitol Hill briefing on June 12 are concrete reforms from executives with decades of experience and a track record of achieving the highest quality ratings in the program.

MA for Tomorrow is built on five pillars: (1) Raising the Bar on Quality; (2) Improving Consumer Navigation; (3) Achieving Risk Adjustment for Care, not Codes; (4) Modernizing Network Composition; and (5) Transforming Benchmarks. Taken together, the policies foster greater competition, reduce provider burden, push quality standards higher, enhance the shopping experience and curb improper payments.

With consistently high-quality ratings, expanded benefits and a proven ability to reach minority populations, the MA public-private partnership is an undeniable success. More than 31 million seniors are enrolled in MA, a growth of over 107 percent since 2014. In the past five years, as seniors voted with their feet, MA grew by 9.1 million enrollees while fee-for-service Medicare shrunk by 5.1 million. 

But even the most successful programs must evolve. To serve current and future retirees, MA must keep pace with medical and technological advances; it must improve the shopping experience to match other retail sectors; it must address loopholes and bad behaviors that dampen competition and choice. While fundamentals of the program remain strong, change is necessary to ensure the MA program of the future is equitable, affordable and focused on health outcomes.

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Landed Gentry and Health

BY MIKE MAGEE

“The title of our lands is free, clear, and absolute, and every proprietor of the land is a princess his own domains, and lord paramount of the fee.” 

Jesse Root, 1798, Chief Justice of the Connecticut Supreme Court

When it came to social hierarchy and family position, land was the ultimate measure of success and influence in Great Britain. But by the time of the American Revolution, our Founders were already fast at work dismantling Primogeniture (“the right of succession belonging to the firstborn child, especially the feudal rule by which the whole real estate of an intestate passed to the eldest son.”) It had already largely disappeared in New England, and was gone in the southern colonies by 1800.

In its place, the colonists envisioned a “free and mobile market,” where land could be traded like money and other goods. To do so, the original land grants and “feudal tenures” were obliterated, and their legal documents swept clean by the new law of the land. The decisions on ownership were made locally, empirically and by “common wish” of those in power.

Property was meant to be traded, fast and furious, but most of all put to “productive use” in a young nation obsessed with rapid growth. As legal historian, Lawrence Friedman, suggested, “In land lay the hope of national wealth; for countless families, it was their chance to make some money. The land, once it was cleared of the native peoples (by hook or by crook), and properly surveyed, was traded with speed and fury. Speculation in raw lands was almost a kind of national lottery.”

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A Hand Up, Not a Hand-Out

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BY KIM BELLARD

As many of you did, I followed the recent debt ceiling saga closely, and am relieved that we now have a compromise, of sorts.  The House Republicans demanded a lot of things, most of which they did not get, but one area where they did prevail was in toughening work requirements for food (SNAP) and income (TANF).  They somehow believe that there are uncounted numbers of “able-bodied” people sitting around on their couches collecting government benefits, a myth that goes back to Ronald Reagan’s welfare queen stereotype, and have long advocated work requirements as the remedy. 

Ironically, according to the CBO, the work requirements passed may actually increase federal spending by as much as $2b, and increase the number of monthly recipients by as many as 80,000 people, but who’s counting?  

All this seems timely because of some new studies that illustrate – once again — that, yes, poverty is bad for people’s health, and helping them get even a little bit more out of poverty improves their health.  

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Matthew’s health care tidbits: Hedge Funds that Do Health Care on the Side

Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

Lots of news about bad behavior in health care this week, with real shots about patient & staff safety at home care company Papa, and Grail misinforming 400 people that they had cancer. But the prize for tone deafness this week comes from another very well funded health care provider system being heartless to its poorest patients. 

This week it’s Allina, a Minnesota “nice” system which actually amended its Epic system so that clinicians could literally not book appointments or provide care to patients who owed Allina money. Clinicians on the sharp end of this were so appalled that they went on the record about their own employer to NY Times’ reporter Sarah Kliff. The most egregious example was a doctor unable to write a prescription for a kid that had scabies–an infectious parasitic disease–who was sharing one bed with two other kids!

Of course Allina also is on the low end of charity care provision (below 1% of revenues). In contrast ten employees make more than $1m a year and another 10 make more than $500,000. 

We all know about egregious private equity funds investing in payday loans and other scummy outfits that prey on the poor. Turns out that if you let a non-profit hospital become beholden to its financial, rather than moral, north star, it starts to behave in a similar manner. Allina, of course, had a smidge under $4bn in its “investment reserve” at the end of 2021. It’s by no means special. UPMC has over $7bn in its reserves (unclear if this includes the investments it has made in startups), while Ascension has a formal private equity fund that controversially paid its former CEOs over $10m as part of its $18bn reserves.

Somehow having hedge funds that provide a little health care service on the side doesn’t leave the best taste in the mouth for how we should be organizing this health care system.

Operation Searchlight: The American-supported Pakistani genocide you probably haven’t heard about

BY ANISH KOKA

On March 25th, 1971, the Pakistani army launched Operation Searchlight, a military campaign to brutally suppress a Bengali nationalist movement.

The roots of the genocide lie in the parting gift British rulers gave to the Indian subcontinent at the time of independence in 1947. British controlled India was separated into Hindu majority India and Muslim majority Pakistan. But because there were two dense non-contiguous Muslim majority areas in British controlled India, the muslim majority country of Pakistan was divided into East and West Pakistan.

East and West Pakistan were linked by religion, but little else. East Pakistan was culturally Bengali, and had much more in common with Bengali Hindus than Muslims in West Pakistan. While Bengalis took pride in their culture and language, West Pakistani’s looked down on the Bengali’s because it was deemed to be too influenced by Hindu culture. While Bengali muslims may have identified themselves with Pakistan’s islamic project, by the 1970s many in East Pakistan had given priority to their Bengali ethnicity over their religious identity, desiring a society more in accordance with Western principles of secularism and democracy. A growing opposition in East Pakistan strongly objected to the Islamist paradigm being imposed the West Pakistani state.

But West Pakistan controlled the military, and formed much of the ruling elite after the partition in 1947. In a move designed to send a message to Bengali speaking East Pakistani’s , the founding father of Pakistan, Muhammad Jinna even made Urdu the national language of all of Pakistan, and branded those opposed as enemies of the State.

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Can AI Part The Red Sea?

BY MIKE MAGEE

A few weeks ago New York Times columnist Tom Friedman wrote, “We Are Opening The Lid On Two Giant Pandoras Boxes.” He was referring to 1) artificial Intelligence (AI) which most agree has the potential to go horribly wrong unless carefully regulated, and 2) global warming leading to water mediated flooding, drought, and vast human and planetary destruction.

Friedman argues that we must accept the risk of pursuing one (rapid fire progress in AI) to potentially uncover a solution to the other. But positioning science as savior quite misses the point that it is human behavior (a combination of greed and willful ignorance), rather than lack of scientific acumen, that has placed our planet and her inhabitants at risk.

The short and long term effects of fossil fuels and carbonization of our environment were well understood before Al Gore took “An Inconvenient Truth” on the road in 2006. So were the confounding factors including population growth, urbanization, and surface water degradation. 

When I first published “Healthy Waters,” the global population was 6.5 billion with 49% urban, mostly situated on coastal plains. It is now 8 billion with 57% urban and slated to reach 8.5 billion by 2030 with 63% urban. 552 cities around the globe now contain populations exceeding 1 million citizens.

Under ideal circumstances, this urban migration could serve our human populations with jobs, clean air and water, transportation, housing and education, health care, safety and security. Without investment however, this could be a death trap. 

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Matthew’s health care tidbits: Health care pricing is cray-zee

Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

It’s no secret that health care pricing has been out of whack for a very long time. This past week PBMs and pharma manufacturers were in front of congressional committees trying to defend the indefensible–how much drugs cost and why? Hospitals have been required to publish their fictional price lists (their chargemasters) for a few years now and more recently have been instructed to reveal what they actually get from health plans for specific procedures. You would assume that this would move overall pricing pressure down to the “best price” but that effect seems to not be happening. At least not yet. This week also did see the bankruptcy of PE-backed (or should that be PE-toppled) emergency staffing corporation Envision. But that was more because its business model depended on surprise billing and not being in insurer networks.

More typical is the recent dispute in which primary & urgent care chain Carbon Health went public with its fight against Elevance subsidiary Anthem Blue Cross in California. While it was in-network Carbon claims that it received less than Medicare rates from Anthem, while its large delivery system competitors were getting 2-4 times Medicare rates.

This sounds about right to me. Late last year I had two identical telemedicine visits for back pain with specialists. One in a private practice, another with a doctor from UCSF–my local academic medical center. Before you troll me, they were both offered to me last minute, I didn’t know which doctor would be available if I needed a procedure, and it’s always good to get a second opinion. Plus I had blown through my deductible by then so they were free to me!

My insurer paid $795 to UCSF and $219 to the private doctor. So for exactly the same thing one provider got more than 3&½ times what the other did.

There’s still lots of chatter about the growth of value-based care, but even within Medicare Advantage there’s lots of fee-for-service, and it even pops up in places it’s supposed to be dead-–like Geisinger. We are nearly 20 years on from the Bush Administration talking about transparency as the solution to health care costs yet the opacity and confusion around pricing is as bad as it’s ever been. Yes, we know some of the numbers, but the US is a long way from seeing the invisible hand working its magic and making the same thing cost the same amount across health care. The only place where that happens is under the neo-Stalinist central pricing of Medicare. Not that that seems to work well either. 

There’ll be a couple more years while the “new” transparent plays out in the market, but don’t expect too much of a revolution. Then likely we’ll try something else.