Road To Hellth

Feb
2

So much for “If you like your doctor, you can keep him”…

One of the major cost-saving initiatives behind ObamaCare is the consolidation of hospitals and doctors into “Accountable Care Organizations”, or ACOs. It is presumed that forcing these organizations to utilize the same doctors, hospitals, clinics, EMRs, labs, imaging centers and so on will create more efficient, seamless and less costly care. (This was not really borne out by Medicare’s own ACO pilot program, but that’s ObamaCare’s story and it’s sticking to it.)

Unfortunately, one of the first casualties of ACO mania is that solemn promise that ObamaCare wouldn’t force you to change either your current doctor or you health insurance. Sad to say, if the experience of pro-ObamaCare Oregon is any guide, the trusting among us have been suckered by their elected officials yet again.

Oregon is a major test case for ObamaCare due to the enthusiastic embrace of the ACA law by state government. Both houses of the legislature and the governorship are held by Democrats, and the governor has pushed for a state version of the ACO concept called “Coordinated Care Organizations” (CCOs) to care for the state’s Medicaid population.

The state’s healthcare systems have responded accordingly. Perhaps foremost of these is the Sisters of Providence Health System, which owns a health insurance company as well as a network of labs, imaging centers, outpatient clinics, hospitals and physicians all the way from Alaska to California. In a bid to bulk up its ACO/CCO credentials, Providence has enagaged in a buying spree that has slurped up physicians and medical practices like so many protein shakes. In addition to primary care practices, Providence has been buying up specialists and sub-specialists. It recently convinced a large cardiology group from The Oregon Clinic to become employees after hinting that independent cardiologists might no longer qualify for hospital privileges in the new CCO environment.

With all of this consolidation it came as quite a shock to many in the Portland-area residents when Providence announced that, as of 2013, patients who were perfectly happy with their HealthNet insurance policies would no longer be allowed to use their lifelong Providence doctors, hospitals or other resources. No reason was given, although it seems clear that Providence was unhappy with the prospect of allowing HealthNet patients to choose to use Providence doctors and hospitals for some aspects of their care, and non-Providence facilities for others. This is exactly in line with ACO philosophy and practice.

‘Chris Ellertson, president of Health Net of Oregon, admitted he was blindsided by Providence’s decision in email correspondence obtained by The Lund Report. “We’ve historically had a good working relationship with them,” he wrote. “And, we talked some time ago about how we could further support the work they are doing within their medical group. It’s the same sort of problem-solving that we’ve been focused on in our work with a number of providers. Then, seemingly out of blue, a termination notice. No phone call. No indication. Astonishing.”’

Providence Health insurance plan CEO Jack Friedman denied that there wan any anti-competitive hanky-panky involved in the decision, saying: “This was a mistake; I had no role in this, no voice,” Friedman told The Lund Report. “There is a huge wall between the health plan and the health system when it comes to payer contracting. The health plan has no voice in a decision on the delivery system nor should it have a voice.”

Regardless, the net affect of the Providence decision is to force HealthNet patients to either change their health insurance, or change the doctors, hospitals and other facilities they may have used for generations. Many people who literally live right next to Providence hospitals and clinics are now being forced to drive for miles to a different doctor and facility that they are allowed to use. Gone are the days when a patient might be allowed to pick and choose among doctors and hospitals based upon which one has the most skill and the best equipment rather than whether or not they happen to belong to the owner of a competing insurance company.

Another disturbing aspect of the decision is that it makes it clear that institutions like Providence are explicitly being given monopoly power under ObamaCare to control not only health insurance in a given market, but the doctors, hospitals, clinics, labs and imaging centers as well. This clearly has the potential to result in situations in which the amount and types of care provided are chosen to maximize overall profits to the Providence system rather than medical benefits to patients.

It seems clear that President Obama and the Democrats in Congress who passed this law either did not know what was in it, or deliberately lied about its implications for consumer choice in healthcare. Or perhaps they had to pass it so that they could find out what was in it?

Categories : Business and Law, Economics, Ethics, Healthcare Policy, Hospitals and Health Systems, Politics, PPACA

Nov
13

“Open Wide and Say ‘Moo!’”: The Book Review

by Dr. Doug Perednia

Whether the American voters realized it or not, arguably the single most important result of the 2012 Presidential election had to do with the future of what President himself has now termed “ObamaCare”. Apparently admitting that resistance to ObamaCare is as futile as assimilation into The Borg, House Speaker John Boehner announced that “ObamaCare is the law of the land” and that House Republicans would cease offering bill after bill trying to repeal it.

A great deal has already been written about ObamaCare and its many moral, medical and economic hazards. Americans for Tax Reform has a web page listing over 20 new taxes that will be levied as a result this law, many of them hitting all Americans directly and/or indirectly rather than just the middle-class. (This list does not include the implicit tax levied on all Americans by forcing them to buy health insurance policies that include a hefty assortment of mandatory coverage items that they will be unlikely to ever use.) There are even whole books that have been written on “Why ObamaCare is Wrong for America ”, “The Truth About ObamaCare”, and “The ObamaCare Disaster”.)

Yet it doesn’t seem as if any of this information made any difference to the outcome of the recent Presidential election. Why? Because, let’s face it: the vast majority of people don’t read much, (or at all). And they certainly are not about to waste valuable television, Wii and texting time learning about something as boring as what the President and a willing Congress have done to the future of American healthcare.

One of the great travesties and tragedies of the 2012 election season was the complete lack of any serious discussion of the philosophy, nature and underlying structure of ObamaCare. Voters were treated to the usual talking points about how this massive law “insurers millions of Americans” on one hand, and “cuts $716 billion from Medicare” on the other hand. Yet the vast majority of voters don’t know anything more about what’s in Nancy Pelosi and Harry Reid’s bill now than they did at this time last year or the year before. The media certainly hasn’t helped to educate them. Hard questions appear to be beyond the capability of the average 21^st century reporter, while actual journalistic research and investigation is something that we can only read about in history books. Heck, media “fact checkers” can’t even seem to distinguish between actual facts and their own interpretation of what a given candidate was trying to say.

Now that it looks as if ObamaCare may be the law of the land for the foreseeable future, it’s even more important that Americans really, truly understand it. The reason should be obvious: this law is going to influence virtually everything that happens when our loved ones get sick or interact with the healthcare system from now on. Things don’t get much more serious or profound than that. That is why every American, regardless of their politics, should read or listen to Dr. Richard Fogoros’ new book, Open Wide and Say ‘Moo!’: The Good Citizen’s Guide to Right Thoughts and Right Actions under Obamacare. We’re serious. Every single American.

Moo! Is a remarkable book on several levels. For one thing, Dr. Rich (as Dr. Fogoros is known from his Covert Rationing Blog) wrote it at a rate of one chapter per week, posting each completed draft on his website for comments from readers. For another, the book is actually easy and interesting to read – at least for the first 12 chapters or so. This alone is unusual for a book dealing with the normally headache-inducing world of healthcare policy.

But most importantly, Moo! is remarkable because it does what no other work has bothered to do throughout the whole multi-year history of ObamaCare: it explains why the mysterious, anonymous people who wrote the Affordable Care Act (ACA) legislation designed the law in the way that they did.

The average person who looks at the actual ACA law is unlikely to be able to decipher much of anything that it says. The average person who knows something about the structure and function of healthcare delivery might (with great effort) be able to understand much of the actual text, but will be perplexed by the apparent illogic of the measures mandated by the law. How can it possibly make sense to mandate that 46 million more Americans have insurance, much of it provided through Medicaid plans that do not even pay the actual cost of the care provided, but make no provision for increasing the number of doctors available? How can Congress mandate that the Independent Payment Advisory Board reduce Medicare costs by $716 billion, but simultaneously insist that Medicare benefits shall not be reduced? And if our insatiable demand for healthcare goods and services has created situation in which the country is being bankrupted, why does ObamaCare increase the number and types of mandated insurance benefits instead of reducing them? On the face of it, it makes no sense.

In Moo!, Dr. Rich manages to illustrate not only the structure but the function of ObamaCare, by explaining the philosophy and intent of the Progressives who wrote it. In some parts, the book actually reads like a detective story as Fogoros goes all the way back to the 1990s HillaryCare legislation to unearth the roots of specific passages and provisions. As Moo! explains, the folks who created ObamaCare have a world view that has been well-defined and consistent for decades. Their perspective is one in which what’s “best” for society trumps whatever might be best for individuals. In addition those with “progressive” views are the people best qualified to decide what is “good” and “bad” from a societal perspective. In other words, those crafting this law truly believe that they can do a better job running the healthcare system than anyone else, and that the passage of ObamaCare has given them the opportunity to remake the American healthcare system as they see fit. The system that they prefer – and that ObamaCare inexorably implements – is one in which decisions about how, where, when and under what circumstances healthcare goods and services will be delivered are centralized. Once made in the minds of government regulators, they will ultimately be shared with the rest of us in a top-down fashion.

“But hang on there, Cowboy!”, many will say. “This sounds like one of those right-wing nut job conspiracy theories about a ‘government takeover’ of medicine! Why should we be expected to read that sort of drivel?”

One great thing about the way Moo! is written is that Dr. Rich simply suggest a hypothesis that appears to fit the facts, and then presents the indisputable real-life attributes of the ObamaCare legislation. We are then allowed to draw our own conclusions about whether these facts actually fit the theory. And while the author openly invites us to come up with an alternative hypothesis for why the law forces providers and patients to do this or that, for us it is darned difficult to come up with an different explanation that makes nearly as much sense. But don’t take our word for it; read it for yourself. We’ve love to hear if you can do better.

The latter portion of Moo! deals with the author’s recommendations about what patients and providers can do to protect themselves and their families against the very real hazards presented by the top-down “socially optimized” administration of healthcare that we’ll be dealing with from now on. (Or at least until this legal and social mess is repealed by a more enlightened, economically and medically realistic Congress.) This is where Fogoros’ story becomes tougher follow, although probably through no fault of his own. For one thing it is easy to become so depressed by understanding exactly what the average patient and clinician are in for, that the solutions proposed seem inadequate to cope the mess. Indeed, it’s not hard to conclude that the only real solution is to get rid of the damned law entirely rather than try to escape its insidious affects as individual – almost fugitive – doctors and patients.

Regardless, we believe that Open Wide and Say Moo! is one of the most original, interesting and most provocative works on the subject of healthcare in general, and ObamaCare in particular, that has come along in many years. It should be mandatory reading for everyone, but particularly anyone who is involved in healthcare, training for any position that will deal with healthcare, and especially every legislator and government official in the world. Perhaps if they see how impossible it will be to produce a satisfactory result with a top-down approach, they will summon the courage (and the cojones) to find a better way.

Categories : Book Reviews, Economics, Ethics, Healthcare Policy, Politics, PPACA

Oct
19

Mass Mandates Round 2 – Part II

by Dr. Doug Perednia

A few weeks ago (how time flies!), we set out to explore the various elements and implications of the newest addition to the state laws governing the delivery of healthcare in Massachusetts: “An Act improving the quality of health care and reducing costs through increased transparency, efficiency and innovation”, and officially identified by the rather more prosaic name of “Chapter 224 of the Acts of 2012”.

We had gone to some lengths to condense the most notable of these 349 pages of new rules and regulations into a PDF document just 39 pages long. Combined with the Massachusetts healthcare laws originally passed under Governor Mitt Romney, and then substantially modified by the Democratic Party-controlled state legislature and Romney’s Democratic successor Gov. Deval Patrick, these laws essentially allow the state government to dictate just about anything and everything about the way healthcare is provided in that fair Commonwealth. Because of this, we have dubbed them “The Mass Mandates”.

Now one might think that the prolonged interval since our last post would have been more enough time for our distinguished readers to review the entire content of Chapter 224, or at least our 39-page condensate. However we’re willing to bet that few, if any, of you did so. After all, most of you have real lives. So in this post we’ll look at some of the specific provision and their implications. Doing so is important because under the second Obama Administration, the “ObamaCare” Affordable Care Act is quite likely to continue to ape the approach taken in Massachusetts. Why? Because the Democratic Party-controlled Massachusetts legislature, Governor Patrick and the Obama Administration share a common perspective with respect to what ails the U.S. healthcare system and how to fix it. (For the definitive work describing this perspective and its implications, we highly recommend the new book by Dr. Richard Fogoros, Open Wide and Say Moo! More on that in an upcoming post…)

So let’s go ahead and see what Massachusetts is mandating now.

The first thing that one notices about the new Mass Mandates is its naked honesty: the government of the Bay State is well on the way to taking complete control of its healthcare system. No more pussyfooting around. No more qualms about “creeping socialism” (or even “leaping socialism” for that matter). No more apologies or half-measures. Private enterprise may technically own the resources used to deliver healthcare services, but government entities will increasingly dictate whether, when, where and how they are to be deployed.

The quite visible hand of Massachusetts state government has been authorized to stick its fingers into just about every aspect of medicine, apparently regardless of who is asking – and paying for – the goods and services rendered. The ways in which it goes about doing this amount to a veritable laundry list of new rules, regulations and regulatory bodies. That’s one reason the text of the bill that was passed into runs to 349 pages.

Let’s go through a number of them individually.

The Health Planning Council

This very-high-level group is located within the state executive office of health and human services. It consists of:

The state secretary of health and human services (or designee) who is the chairperson

The commissioner of public health (or designee)

The director of the office of Medicaid (or designee)

The commissioner of mental health (or designee)

The secretary of elder affairs (or designee)

The executive director of the center for health information and analysis (or designee)

The executive director of the health policy commission (or designee), and

3 members appointed by the governor: a health economist, a health policy planner, and a health care market planner/service line analyst

The very first thing the Health Planning Council will do is to form an advisory committee that is supposed to “reflect a broad distribution of diverse perspectives on the health care system.” The second is to create a comprehensive “state health plan” that is intended to keep track of, well, everything:

The state health plan developed by the council shall include the location, distribution and nature of all health care resources in the commonwealth and shall establish and maintain on a current basis an inventory of all such resources together with all other reasonably pertinent information concerning such resources. For purposes of this section, a health care resource shall include any resource, whether personal or institutional in nature and whether owned or operated by any person, the commonwealth or political subdivision thereof, the principal purpose of which is to provide, or facilitate the provision of, services for the prevention, detection, diagnosis or treatment of those physical and mental conditions experienced by humans which usually are the result of, or result in, disease, injury, deformity or pain…

(d) The department may require health care resources to provide information for the purposes of this section and may prescribe by regulation uniform reporting requirements. In prescribing such regulations the department shall strive to make any reports required under this section of mutual benefit to those providing, as well as, those using such information and shall avoid placing any burdens on such providers which are not reasonably necessary to accomplish this section. Agencies of the commonwealth which collect cost or other data concerning health care resources shall cooperate with the department in coordinating such data with information collected under this section.

That’s right. From the lowliest medical assistant to the most sophisticated gamma knife, the Health Planning Council wants to know about anything and everything that has anything to do with the provision of healthcare within the state. Think about that for a minute; about how massive and intrusive and expensive and permanent just this one first provision of the Mass Mandates law happens to be. Every single hospital, clinic, nursing home, imaging center, (and maybe even 24 hour fitness center depending upon how the Health Planning Council wants to define its regulations) will need to report whatever the Council decides it needs to report. How detailed do these reports have to be? It’s completely up to the discretion of the Council. How many square feet is your facility? What pieces of equipment does it have, including make, model and year of manufacture? How many people do you employ, and what are their names and job titles? What is their training? Are they certified, and if so in what and by whom? How many computers do you have? What software are you using for EMR, CPOE, lab orders and billing? Anyone who has ever had to deal with the Internal Revenue Service, the EPA, OSHA or federal securities laws will recognize the sinking feeling that accompanies these sorts of requests for information. Whether it’s really “important” or “necessary” is a matter of opinion; in this case the opinion of members of the state Health Council.

Of course the Health Council’s database will be useless unless it’s maintained and up-to-date, which means that all of this information will need to be updated and re-submitted every year. Otherwise it wouldn’t be of any practical use. One immediate result is going to be a substantial increase in the administrative overhead faced by very healthcare facility in the state, along with a corresponding increase in their cost of doing business. This new cost will be incurred without delivering one iota of actual healthcare goods or services to anyone, anywhere in the state. By definition, the Council’s first act will be to lower the productivity of the healthcare system in Massachusetts. (Productivity is defined as the number of units of input (e.g., dollars), required to produce a unit of output (e.g., number of patients cared for).

Why would they want to do this?

The rationale offered by the law is that all of this information will assist the Council in “making determinations of need”. When it comes to healthcare, determining need is not just about what community needs a new clinic or a new MRI machine, but it’s also a tool that allows regulators to block the introduction of new medical resources into any community where they do not wish them to go. The reasoning is that the availability of facilities will cause them to be used, thus increasing the total cost of healthcare.

But lots of states and municipalities make determinations of need just fine every day without demanding this level of detailed reporting from every healthcare establishment in the state, much less doing so in perpetuity.

The only rational explanation for establishing this database is if the Health Council (or its surrogates) intends to insert itself more forcefully into the operational details of delivering medical care. While some readers might think that we’re being alarmist by simply mentioning the possibility of direct government control of – or at least interference in – the makeup and operation of even private medical facilities, the rest of the law seems to support the idea. Indeed, there seems to be no question that the government of Massachusetts is getting into the business of telling doctors and patients exactly what they’re expected to do, how, and when. Let’s let the law speak for itself.

The very next entity created by Mass Mandates 2 is the Health Policy Commission. This commission “shall be an independent public entity not subject to the supervision and control of any other executive office, department, commission, board, bureau, agency or political subdivision of the commonwealth.” In other words, it’s not answerable to anyone. The commission is governed by a board of eleven appointed people, including the secretary of health and human services, the secretary for administration and finance, and nine other health care policy and finance “experts” appointed by the governor, the attorney general and the state auditor. Only one doctor is allowed on the board: a primary care physician. (Medical specialists need not apply regardless of their qualifications.) An equal number of board members (i.e., one) shall be appointed to represent the interests of labor unions. Just to make sure that no one thinks that this commission can do pretty much anything it wants without having to answer to anyone, the law is explicit:

(d) Any action of the commission may take effect immediately and need not be published or posted unless otherwise provided by law.

The executive director may appoint other officers and employees of the commission necessary to the functioning of the commission.

The executive director shall not be required to obtain the approval of any other executive agency in connection with appointment of employees.

The money used to finance the commission and its activities is going to be coughed up by the very people and organizations that it intends to regulate:

Each acute hospital, ambulatory surgical center and surcharge payor shall pay to the commonwealth an amount for the estimated expenses of the commission.

One of the primary missions of the Health Policy Commission is to strictly regulate the cost of all healthcare goods and services provided by any organization providing a significant amount of healthcare goods and services to the public, regardless of who is paying for it. This is done by fining hospitals and clinics if the total dollar value of the goods and services that they provide increases faster than an arbitrary amount specified by the law – initially the rate of growth of state GDP, then less than the increase in GDP, followed by whatever limits might be set at the whim of the commission. Penalties for missing the targets will apply to groups and hospitals with more than $25 million in gross revenue; about a medium-sized group practice. The penalty? Initially it’s having to come up with a plan for coming into compliance, but if that doesn’t work (or the commission decides that it wasn’t good enough) providers can be fined a civil penalty of up to $500,000.

One interesting attribute of this regulation is that the government is imposing these regulations and penalties not based upon the cost of any particular item, nor based upon the inappropriate utilization of healthcare services, but based upon the change in cumulative total healthcare expenditures. There are many reasons why the total costs incurred by any particular healthcare institution or provider might rise at a rate greater than state GDP. The provider in question might, for example, experience increases in the cost of the medications or other supplies that it needs to treat patients. Or it might experience an increase in the number of older, sicker patients treated. Or it might even experience substantial cost overruns in government-mandated expenses such as electronic medical record systems or the administrative overhead needed to comply with new reporting requirements and try to raise prices to recoup the cost before going bankrupt. (Or even the new mandatory fees incurred to pay for the activities of the Health Policy Commission itself.) It really doesn’t matter. According to the law, the commission is obligated to crack down on sources of “excess” spending and bring them back into line with politically “acceptable” norms.

While it certainly sounds nice to say (as the law does) that the cost reductions will be managed by increasing “efficiency”, government management of healthcare almost universally works in the opposite direction. Since the same regulators imposing cost restriction have said that “quality” and “patient satisfaction” must not suffer at the hands of cost cutting, clinicians are presented with an impossible situation. How can you deliver friendly, “hands on” service if you’re required by law to be glued to a computer screen? How can one provide better clinical care if newer, more effective (but also more expensive) medications are denied a place in cost-conscious formularies? How is it sustainable for clinicians be held responsible for the total cost of care, when patients are under no obligation to take the medications or other treatments prescribed, or even take the most basic responsibility for their own care?

It is very, very difficult to see how these sorts hard-and-fast, yet mutually exclusive requirements can possibly be compatible with an effective and sustainable healthcare system. However they are perfectly in line with fostering an ineffective and unsustainable one.

We’ve only begun to scratch the surface of what’s required by the brave new world of Mass Mandates 2. There is LOTS more to come. The journey will continue in our next post on the topic.

Categories : Business and Law, Clinical Care, Economics, Healthcare Policy, Hospitals and Health Systems, Political Hellth, Politics, PPACA

Aug
20

Mass Mandates Round 2 – Part I

by Dr. Doug Perednia

In 2006, the Massachusetts legislature passed “The Massachusetts Mandated Health Insurance Law”, which was signed by then-Governor Mitt Romney. As most of our readers undoubtedly know, this law subsequently served as the model for the Affordable Care Act (ACA). The ACA is now popularly known and widely referred to as ObamaCare.

While the 2006 Massachusetts law has been labeled “RomneyCare” by many people, it’s not at all clear that that is an honest label. As described by Avik Roy in his The Apothecary blog, although Governor Romney signed the bill, he wanted it to apply only to catastrophic coverage and specifically vetoed several of its key provisions, including an employer mandate forcing companies with more than 10 employees to provide them with health insurance or pay fines. These vetoes were immediately overridden by the Democratic legislature, and it fell to Romney’s Democratic successor Gov. Deval Patrick to implement and modify the provisions of the law in a way that set the final example for ObamaCare. As it happens, Governor Patrick is a prominent figure in President Obama’s re-election campaign, and the two appear to see eye-to-eye on how healthcare should be implemented and regulated in this country. It might therefore be more accurate if we referred to the state of Massachusetts’ approach to healthcare by a more generic label such as “The Mass Mandates”. For when you come right down to it, the Massachusetts approach mostly consists of a large series of mandates: mandates to individuals and businesses to buy insurance for yourself or others, mandates to insurers to provide unlimited insurance coverage wherever and whenever it is desired, and mandates to healthcare providers to do whatever is asked of them regardless of whether it’s profitable or not.

While The Mass Mandates have produced the highest rate of health insurance coverage in the nation (some 98% of Massachusetts residents are covered by some form of health insurance), like ObamaCare the original law deliberately did nothing to reduce costs or the incentives to spend more for healthcare, even as it broadened the pool of people capable of making claims upon the system. One predictable result has been an explosion in healthcare costs and spending within the state. Massachusetts has among the highest health insurance premiums in the country. As recently described by an article in the New England Journal of Medicine:

Massachusetts spent more than $61 billion on health care in 2009, a figure that places it among the highest-spending states in the country. In the past 5 years, growth in health care spending has consistently exceeded economic growth, resulting in challenges both for lawmakers dealing with a constrained state budget and individuals required to purchase coverage privately. In fiscal year 2012, health care will consume 54% of the state’s budget, up from 49% in fiscal year 2009, with the bulk going toward Mass Health (Medicaid) and individual subsidies for purchasing health insurance. For individuals, monthly premiums for a minimal (“bronze”) plan purchased through the Commonwealth Choice connector (the state insurance exchange) increased from about $175 in 2007 to $275 in 2012 (a 57% increase), despite slowed growth in overall health care spending since the start of the recession in 2008.

One might add that there have been other adverse consequences as well. According to an annual survey by the Massachusetts Medical Society, the waiting time needed to see a family physician has been rising steadily – from 29 days in 200 to 36 days in 2011 to 45 days in 2012. About half of internists and family practitioners are not taking new patients.

Of course, if the original Mass Mandates law had done something about healthcare spending at the time that it was proposed, it probably would have sparked so many objections that it never would have been passed by the legislature. Voters like healthcare coverage – especially if someone else is paying for it – but they get cranky when you tell them that there will be some sort of limitations on their coverage such as overt rationing, not being able to see a doctor they like within a reasonable period of time, or formulary lists filled with cheap and relatively ineffective second or third-line drugs. As a result, it has taken until this summer for the other shoe to drop, and for Phase II of the Mass Mandates to take place. For on August 6^th of this year, Governor Patrick signed a new law that shows how the next phase of ObamaCare is likely to play out if the current administration continues to hold the keys to the American healthcare system after the November 2010 election.

It’s been remarkable to us that so little attention has been paid to the contents and nature of this new law (dubbed “An Act improving the quality of health care and reducing costs through increased transparency, efficiency and innovation”, and officially identified by the rather more prosaic name of “Chapter 224 of the Acts of 2012”. The passage and signing of this bill into law was something of a big deal for news outlets in Massachusetts, but more or less regarded as just a footnote in the rest of the country. But this is not just some “local yokel” healthcare initiative occurring in an out-of-the-way state. The people running this thing belong to the same political party and healthcare philosophy as the folks currently running the White House, Department of Health and Human Services, Department of Justice and the Internal Revenue Service. There is an excellent chance whatever is done in Massachusetts right now is going to be translated directly into national healthcare policy. After all, the ACA law provides the Secretary of HHS with an enormous amount of discretion as to how, where and when to implement whatever plans that (s)he may wish to put into place. And as The New York Times recently reported, many healthcare businesses seem to be betting that Mr. Obama will get his four more years.

With that in mind, we’ve recently wasted spent quite a few hours reading and trying to comprehend the new 2012 Mass Mandates that have just been signed into law. This is no trivial task. The text of the modifications that have been made run to an extraordinary 349 pages, with much of it in legalese and references to other documents that are virtually incomprehensible to the average person. Here is just a small sample:

SECTION 5. Section 16 of chapter 6A of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by striking out, in line 52, the words “pursuant to section 2A of chapter 118G” and inserting in place thereof the following words:— under section 13C of chapter 118E.

SECTION 6. Section 16E of said chapter 6A is hereby repealed.

SECTION 7. Sections 16J to 16L, inclusive, of said chapter 6A are hereby repealed.

SECTION 8. Section 16M of said chapter 6A, as appearing in the 2010 Official Edition, is hereby amended by striking out, in lines 3 and 4, the words “commissioner of health care financing and policy” and inserting in place thereof the following words:- executive director of the center for health information and analysis.

In an effort to make things more comprehensible, we tried to extract from the law what seemed to be the major actions and initiatives. By simply cutting and pasting, we have created the nearby 39-page document that appears to contain the most notable parts of the legislation from the perspective of patients, providers and those who will have to pay for all of the initiatives described.

Download (PDF, 232KB)

Over the next week or so we will write more about the new Mass Mandates law in general, and some of its specific elements in particular.

Categories : Business and Law, Clinical Care, Economics, Healthcare Policy, Political Hellth, Politics, PPACA, The Practice of Medicine

Jul
4

The Tragedy of the Supreme Court’s Affordable Care Act Ruling

by Dr. Doug Perednia

The past week’s Supreme Court ruling on the constitutionality of ObamaCare is a tragedy on at least two counts. The first tragedy relates to the relationship between our Federal government and the citizens who are subject to its will. The second tragedy relates to the healthcare system itself, and affects all of us who seek, deliver and pay for care. It is hard to say which is the greater.

Let’s address the legal implications first. We are not lawyers nor do we pretend to have any special insights into law or the constitution, but some common sense conclusions are inescapable.

The first conclusion is that the law passed by the Democratic party-dominated Congress of 2010 and President Obama establishes a precedent for the taxation of any activity – or inactivity – that future legislators and Presidents deem to be undesirable. Although much has been made of the Supreme Court striking down the power of Congress to penalize the non-purchase of health insurance by use of its ability to regulate Commerce, it seems to us that this is a distinction without a difference. As written, the Affordable Care Act law says that the Federal government will impose a penalty on anyone who is uninsured. Now the law has been interpreted by the Supreme Court to impose a tax on anyone who is uninsured. If you’re in the class of individuals affected it’s pretty difficult to discern how one is any better or worse than the other.

Given this turn of events it certainly seems as if there is absolutely nothing that Congress cannot choose to tax or not tax in order to reward or punish anyone it pleases. It is now clearly within the power of Congress to support the government’s and union’s ownership of General Motors (as well as to support “green” business initiatives) by offering to tax anyone who fails to purchase a Chevy Volt. Slovenly and unsightly couch potatoes can be taxed for failing to purchase and regularly view the entire series of “Brazil Butt Lift” DVDs. The housing industry would clearly be stimulated (and thereby improve the unemployment rates nationally), by imposing a tax on anyone who does not own a home. The possibilities for social and economic engineering are unlimited. No longer does the government need to fund economic activity that it deems desirable – it can simply tax any social or economic behavior that it finds undesirable. Anyone who might doubt that this sort of thing would actually happen need only look to California for examples of publicly mandated investment. Recently the California Energy Commission mandated new standards for housing construction starting in 2014:

…including a rule that all new homes have roofs equipped for solar paneling. The panels are still optional—for now.

Other highlights: Ceiling fans, hot water pipes, air conditioning units and even the sunlight exposure from windows will now be regulated. Lighting systems must be controlled by sensors, roofs must be slanted in the right direction to have full access to the sun, and sunlight must not be impeded by chimneys and skylights…

The new rules will increase the average construction cost of a new California home by an estimated $2,300…

“So what?” many will ask. Clearly some of this has been going on for generations. Cigarettes and alcohol have been taxed for donkey’s years as a way of encouraging temperance and discouraging lung cancer and chronic obstructive pulmonary disease, and for the most part no one bats an eye.

But the Supreme Court’s decision on ObamaCare clearly enlarges the scope of behavior-based taxes beyond anything we’ve seen before. Instead of being taxed for doing something, the way is now clear to tax Americans for not doing whatever it might be that is deemed to be unpatriotic at the time.

“But wait a minute,” others will say, “This very blog has come out strongly in favor of universal healthcare coverage, and even for taxing every non-poverty-stricken American in order to help pay for it. Where is the consistency there?” A fair point, but there is a big difference in taxing people in order to help fund the delivery of a good or service that will directly benefit them, and taxing someone strictly in order to punish them economically for failing to purchase for themselves something that a politician or lobbyist deems to be desirable.

But let’s move on to the healthcare tragedy created by the Supreme Court’s ruling. What’s different today that wasn’t the case last week, last month or last year?

What’s different is that the disaster of the Affordable Care Act (ACA) is now guaranteed to continue at least until the November presidential election, and possibly for many years beyond. It has become impossible to move on. There is, at least for the next few months to years, no way of doing things right. No way to save billions of dollars in needless expenses, of improving the efficiency of care, or of insuring American’s constructively. With a stroke of Chief Justice John Roberts’ pen, the Court’s decision has made us much, much poorer – both medically and financially.

The financial loss the nation has suffered (and will continue to suffer) is hard to quantify, but is hardly abstract. The cause of this loss is simple: uncertainly.

There is certainly no need to even begin to document all of the misguided and counterproductive features of the ACA in this post. Simply search The Road to Hellth for “ACA” and you’ll find scores of examples. Still better, click on over to The Covert Rationing Blog and read Dr. Rich’s book-in-progress “Open Wide And Say Moo! – The Good Citizen’s Guide To Right Thoughts and Right Actions Under Obamacare” – a series of essays that is probably the most insightful work on the topic that exists today. But among those features are a host of provisions that practically ensure the long term failure of ObamaCare no matter what the outcome of the November election might be. These range from giving employers financial incentives to dump millions of workers onto federally subsidized insurance exchanges, to increasing the federal budget deficit by at least $500 billion over the next ten years, to increasing the cost of premiums by mandating elaborate benefits for buyers of all health insurance policies (including “bronze” plans) while simultaneously making it difficult or impossible for Americans to utilize healthcare savings accounts, to demanding that $500 billion be cut from Medicare without a corresponding reduction in benefits, to an astonishingly poorly conceived and destructive tax on the gross sales of makers of medical devices.

When something as basic and as economically important as healthcare is seen to be essentially unstable and unsustainable, rational people will defer investing in healthcare until a path to stability is clear. All sorts of decisions are put on hold. Entrepreneurs stop innovating – they have no idea whether their creations will be politically or economically practical in the future. Employers stop adding employees in order to reduce their exposure to increases in health insurance costs. Business creation goes into hibernation until long-term costs become clearer. Families defer spending. The ripple effects go well beyond healthcare into the national and world economies.

By upholding the ACA, the Supreme Court has simply delayed the ultimate failure of ObamaCare and the implementation of a better, more affordable, more efficient and sustainable healthcare system. We’re going to have to wait until our healthcare system self-destructs in order to save it.

That’s the real healthcare tragedy here.

Categories : Business and Law, Clinical Care, DAP Blog Entries, Economics, Healthcare Policy, Political Hellth, Politics, PPACA

Archive for PPACA

So much for “If you like your doctor, you can keep him”…

“Open Wide and Say ‘Moo!’”: The Book Review

Mass Mandates Round 2 – Part II

Mass Mandates Round 2 – Part I

The Tragedy of the Supreme Court’s Affordable Care Act Ruling

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