Kansas only state to increase number of uninsured: A how NOT to do it strategy

The title of Alan Bavley�s article, �Kansas is only state to see an increase in its uninsured rate, survey says�, (Kansas City Star, August 5, 2014) kind of says it all. It could be seen as a victory by some. Four years after the passage of the Affordable Care Act (ACA), aimed at expanding health coverage to more Americans by a combination of strategies including the creation of both state-run and federally-run (for those states that chose not to run their own) insurance exchanges to match people seeking coverage with insurance companies and subsidizing premiums for the moderately low-income, and expanding Medicaid for the very low-income, Kansas has succeeded in actually reducing the number of people covered!

The adult uninsured rate in Kansas rose from 12.5 percent last year to 17.6 percent during the first half of this year, giving the state the seventh-highest rate in the nation, according to data collected as part of the Gallup-Healthways Well-Being Index�. in other states uninsured rates declined or remained unchanged. Kansas was the only state with a statistically significant increase in the percentage of uninsured residents.

One could construct a fantasy out of whole cloth demonstrating how this proves why the opponents of the ACA were right all along; that it is not increasing health care coverage because it is evil and socialist, and that the increased costs for some people, along with cuts in the number of employed folks because of policies that do not always support �job creators� (read: very rich people) have decreased our employer-based insured group. Of course, that would be incorrect, but I expect to see it anyway.

In fact, those governing my state have worked very hard to make this happen. Governor Brownback and most of the state legislature are strong opponents of Obamacare, and have done what they could to make it not succeed. When the Supreme Court ruling allowed states to opt out of expanding Medicaid, Kansas did so, eliminating the very poor (under 133% of poverty) from the method the law intended for them to receive coverage. Kansas also chose not to develop a state-run insurance exchange and pu up as many obstacles as it could to the federally-run one. One of two Court of Appeals decisions (discussed in this blog in ACA: Where are we? And where should we go?, July 27, 2014) ruled that subsidies could be available only to enrollees in state-run exchanges (which Kansas doesn�t have); it hasn�t gone into effect yet, because another district�s Court ruled the other way, so we will have to wait for the Supreme Court to decide, but if it is upheld would bolster the number of Kansans not getting insurance.

But a decrease in the number of insured? The only one? Surely that is a notable accomplishment. How did we pull that off? ��It�s eye-popping. Kansas really sticks out,� said Dan Witters, research director for the Well-Being Index, an ongoing national poll that surveys people�s health, relationships and finances.� For starters, it could, possibly, not be exactly true, but a data anomaly of the survey somehow. This is basically the position of the state�s Insurance Commissioner, Sandy Praeger, who said

�the number �appears to be an anomaly that needs more review. To have the uninsured jump that much in one year would be unprecedented.� The uninsured numbers in Kansas have hovered around 12 to 13 percent for many years, Praeger said, adding, �We will try to find out where the discrepancy is.�

This is worth noting, as Praeger is one of the few honest, trustworthy, and non-ideological members of state government in Kansas. Note that she does not claim that it is a liberal lie, or that it is a good thing, but just that it is inconsistent with previous data and she will try to find out why there is a discrepancy. If that is the reason, I�m sure she will.

But there are reasons to think that the numbers may not be inaccurate, even if they turn out not to be quite as bad as this survey indicates. Since the election of Governor Brownback in 2010, and with the support of the legislature, taxes in Kansas have been slashed, particularly income tax rates on high-income people and corporations and business taxes. The motivation was a profound belief in supply-side economics, that tax cuts would stimulate job growth.  Unfortunately, it has not. Job growth in Kansas has been more sluggish than in the country as a whole, and the state is facing enormous deficits. Cuts in spending have been dramatic, but the problem is, in fact, on the supply side � not enough tax revenue.  People don�t have jobs, and thus often don�t have enough income to qualify themselves for the exchanges, even if subsidies are allowed by SCOTUS to continue. The state has a very large number of undocumented workers (and most are indeed working, or in families of people working) who would not be eligible for coverage by any part of ACA, and can only get it if their employers pay for it. Which many do not.

While many states with Republican governors have pursued many of the same tacks as Kansas, including limiting the impact of ACA and cutting taxes, Kansas has been in many ways a test case for these strategies, even more than Wisconsin, because of its strong Republican tradition. Americans for Prosperity has a very strong political and financial influence in the state, and it is heavily financed by the Koch brothers whose Koch Industries is based in Wichita, Kansas (where Charles Koch still lives). Cutting taxes for the wealthy and corporations, and blocking any opposition to fossil fuel expansion, is the cornerstone of state politics, not ensuring the health or well-being of its residents.

In a larger sense, however, this is more than a story about Kansas. It may be the only state with a statistically significant increase in uninsured in the last year, but it is far from the state with the largest percentage of uninsured. Many other states that have not expanded Medicaid, and cut social services, have similar situations. Sadly, of course, many of these states (particularly in the southeast) started pretty far down, much worse than Kansas did, and have dug themselves deeper in the hole. The real story, I think, is in the states that, despite being southern and conservative, have chosen to expand Medicaid, and have seen real benefit for their people.

The Gallup poll found that the 10 states with the largest reductions in uninsured rates this year had all expanded their Medicaid programs and had either created their own exchanges or partnered with the federal government on an exchange. Arkansas saw the steepest decline, from 22.5 percent uninsured in 2013 to 12.4 percent this year. Kentucky was second with a decline from 20.4 percent uninsured to 11.9 percent.

Good policies can actually help. The state with the actual highest rate of uninsured people is Texas. �Look out, Texas,� Governor Brownback stated in announcing his original tax cuts, �here comes Kansas!�  He was talking about job growth, which we haven�t achieved, but we are making much more progress on denying people access to healthcare coverage.

ACA: Where are we? And where should we go?

I am finished writing the book, as yet untitled, that I have been working on during my sabbatical, which accounts for the sparse number of blog posts. This is not to say that the book is anywhere near ready to be published; I am sure it will need more revisions.

However, it does mean that I am likely to be posting to the blog more frequently, as I find things that inspire me to write.

Thanks for your patience!
Josh

The Affordable Care Act (ACA) has been law since 2010, and was supposed to have been fully implemented this year in 2014, although as is clear many of its provisions have not yet been. The most important has been the failure of about half our states to implement the expansion of Medicaid, which was the mechanism through which the law intended to cover all those poor (incomes under 133% of the federal poverty level) who are currently ineligible for Medicaid (most of those now receiving it are poor children and their mothers, although the majority of dollars are spent on nursing home care). This is legal as a result of the Supreme Court decision that was important because it made the rest of the law legal; this is, I think, of faint solace to those poor people who live in my state of Kansas and the others who have failed to expand Medicaid despite the fact that the federal government would have paid 100% of the cost for 4 years, then 90%.

The newest court actions that affect ACA are two Court of Appeals decisions which say, basically, opposite things about the subsidies that support the premiums of people making above 133% of poverty but less than allows them to pay the full amount.[1]One court decided that people living in states that ran their own exchanges were eligible for the subsidies, but that those who were in federally-administered exchanges were not. The other appeals court decided that both were. Of course, those states that have federally-administered exchanges are those with governors and legislatures who oppose ACA completely; they include all those who did not expand Medicaid plus many more (about 36 altogether). This suggests some political agenda; the interpretation of Congressional intent rather than parsing the words, has historically been the basis for such court decisions. It also will mean that the cases will go to the Supreme Court, sometimes known as SCOTUS, but now appropriately called COCUHL (Court of Citizens United and Hobby Lobby), where it will be amazing if a conscious, careful, legal approach supersedes politics. The decision to basically gut the Hobby Lobby decisions one remaining protection only a day after it was announced bodes ill. The Republicans in Congress have decided to sue President Obama for not implementing portions of the ACA, which, as Timothy Egan of the NY Times points out, ��they have tried to repeal more than 50 times.�[2]

What has the Republicans so flustered that they have taken to self-contradictory actions is, in fact, the success of the ACA at achieving many of its goals. These are summarized in another NY Times op-ed, by Paul Krugman, titled �Obamacare fails to fail�.[3]There has been a huge surge in enrollment, and while indeed some people are paying more (largely healthy young people who are low risk for high-cost illness, thus previously had lower premiums), most people (including 74% of Republicans) are happy with their current premiums. In addition to the early wins (preventing insurance companies from not covering those with pre-existing conditions, allowing young people to stay on their parents� insurance until they are 26), we now add over 6 million people who are newly covered, and can access health care. Despite decisions such as Hobby Lobby, most women will now get contraceptive coverage without a copayment. It is a good thing. This is why opponents (mainly ideological) are trying any trick that they can to limit its effectiveness, including the two biggest addressed above�not expanding Medicare and trying to block subsidies for those on the federal exchanges. That is to say, trying to limit health insurance coverage to our less-affluent citizens.

But ACA, even if it came through all the court decisions unscathed, is not a solution. It doesn�t cover those who are not citizens, even though they live here. It is a gift to insurance companies, who still get to charge high rates and make enormous profits, but now have the federal government paying the premiums. Therefore, it will not really save cost. Don�t get me wrong � I am not advocating that we provide less of the health care people need to save money (although I do advocating not providing �health care� that will not help or even harm people just because someone can make money on it). I am saying that the huge profits guaranteed for insurers, and other components of our system who make profit, make it excessively costly. It costs us way more per capita, for poorer health outcomes, than do the healthcare systems of other developed countries. The latest edition of �Mirror, Mirror on the Wall�, published in 2014 by the Commonwealth Fund demonstrates this clearly; in comparing 11 wealthy countries the US ranks #11 overall, and #11 in 3 of the 5 areas examined (Efficiency, Equity), and Healthy Lives), #5 in Quality, and #9 in Access. It achieves this less-than-mediocre performance by spending (2011) $8508 per capita, while the other 10 countries spent from $3182 (New Zealand) to $5669 (Norway).[4]

The problem is not that our system is not working, but that it is. Paul Batalden is famous for saying �every system is perfectly designed to get the results that it gets�, and ours is. The results that we get are relatively poor health outcomes on a population basis, large numbers of people excluded from health care coverage (even after ACA), many people getting unnecessary care because someone can make a profit on it, and the bizarre concept that there are not only people who are preferable to provide care for (because of their wealth or insurance status) but even diseases that it is preferable to provide care for (because the profit margin is better). Our system is not designed for people�s health; it is designed so that some (providers, insurers, drug companies, etc.) can make profit. It gets the results it is designed to get.

But that is unacceptable. We need a health system designed to maximize the health of our people. All our people. And we need it yesterday.

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[1]Goodnough A, Ruling on Health Care Subsidies Puts Coverage at Risk, NY Times 7/23/14, http://www.nytimes.com/2014/07/24/us/politics/court-ruling-on-health-care-subsidies-risks-loss-of-coverage.html

[2]Egan, T, �Ambulance Chaser in the House�, NY Times, 7/26/14, http://www.nytimes.com/2014/07/26/opinion/timothy-egan-Congresss-Next-Big-Idea-Sue-Obama.html

[3][3]Krugman P, �Obamacare fails to fail�, NY Times, 7/13/14. http://www.nytimes.com/2014/07/14/opinion/paul-krugman-obamacare-fails-to-fail.html

[4] Karen Davis, Kristof Stremikis, David Squires, and Cathy Schoen, Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally, 2014 Update, The Commonwealth Fund, June 2014. http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror

Doctors' incomes and patient coverage: both need to be more equal

On Sunday, January 18, 2014, the New York Times ran another stellar front-page piece by Elisabeth Rosenthal addressing the fact that, as the title states clearly, Patients� Costs Skyrocket; Specialists� Incomes Soar. It continues, with detailed documentation, her explanation of how providers � in this case doctors, and in particular the most highly paid subspecialists -- game the system of insurance reimbursement to maximize their income, and how patients pay the price. She focuses particularly on dermatologists, whose combination of high income and low workload makes them the exemplar of what medical students call the �ROAD�, the specialties of radiology, ophthalmology, anesthesiology, and dermatology, all of which are known for having high income/work-hours ratios.

Rosenthal addresses in particular a kind of dermatologic surgery called Mohs surgery, which commands a high price. Mohs surgery is very good for its ability to identify margins of a skin cancer and leave less of a scar, but it can be, and often is, overused at high cost. She cites a particular case of a woman who had a small basal cell cancer (the kind that almost never metastasizes and is often simply excised) removed from over her cheekbone and had a bill of over $25,000. �Her bills included $1,833 for the Mohs surgery, $14,407 for the plastic surgeon, $1,000 for the anesthesiologist, and $8,774 for the hospital charges.� The plastic surgeon, by the way, was called in � along with the anesthesiologist � to close the small lesion from the excision that the dermatologist was unwilling to do.

The cases that Rosenthal documents are typical enough that they cannot be  called �abuses� because they are the norm; it is, of course, the entire system that is the abuse. It would be absurd if it were not so real, if it didn�t skew the entire health care system away from primary care and toward specialties where enormous incomes are made by billing � and collecting � for each single activity. Rosenthal describes the RUC, the AMA-convened body that makes �recommendations� to Medicare about the relative value (and thus payment) for procedures, as well as for other forms of patient care -- such as listening to you, examining you, thinking about your problem, making a diagnosis, and recommending treatment -- which are well undervalued compared to procedures. I discussed the RUC, and what I consider its outrageous behavior, in Changes in the RUC: None.. How come we let a bunch of self-interested doctors decide what they get paid?, July 21, 2013, and earlier in  Outing the RUC: Medicare reimbursement and Primary Care, February 2, 2011, but Rosenthal does an excellent job of describing its perverse incentives. Given that Medicare takes the RUC�s recommendations 95% of the time, and that most insurers base their payments on Medicare�s, the RUC, which is heavily stacked against primary care, essentially sets doctors� reimbursement. And this is not to the benefit of patients, either financially or medically.

In another article, Rules for Equal Coverage by Employers Remain Elusive Under Health Law, buried much farther inside the paper but also very important, Robert Pear describes the fact that the Obama administration has chosen to not (yet) enforce rules which allow companies to offer discriminatory levels of coverage to some employees than to others; generally, �better� coverage to executives than to line workers. There is already a ban on such discrimination in companies that are self-insured, but the Affordable Care Act (ACA) extended this to those who purchase coverage from insurance companies. The possibilities for discrimination are illustrated by the things that are forbidden; for example, covering only executives and not others, paying the full cost of executives� premiums while making lower-paid workers pay for a portion of their benefits, or offering different terms for coverage of the dependents of executives and other workers.

Of course, the companies (read: the executives who run the companies and stand to benefit from discriminatory practices) disagree. Pear quotes Kathryn Wilber, from the American Benefits Council �which represents many Fortune 500 companies� as saying �Employers should be permitted to provide lower-cost coverage to employees who may not be able to afford the comprehensive coverage being provided to other employee groups,� which, of course, would not be an issue if the company paid for comprehensive coverage for all employees. The one �benefit� that may be excluded from the non-discrimination rules are �certain types of executive physicals�, which is ironic because there is no data that these benefit most people, including executives, but rather increase both the cost of care and the risk (in follow-up tests for false positives) to the patient. Certainly there are some occupations where the risk of something going wrong is high enough that it exceeds the risk of harm, changing the harm/benefit ratio -- airplane pilots for example, or possibly those who drive buses full of school children. But virtually no corporate executives are in this group.

The reason companies want differential benefits is primarily to save money by not offering good coverage to the majority of their employees, and also as a �perk� that they can offer to their executives. It is presented as parallel to other market goods, the difference between �serviceable� and �excellent�. This is even carried over in the metaphor to describe the low-copay plans that the ACA was going to tax, �Cadillac� plans, when everyone knows that a Chevy is just as good at getting you where you want to go, just not in such luxurious circumstances. But this is a lousy metaphor for health care, and confuses two benefits. One, which is the intent of the �Cadillac policy� tax, is whether individuals have to make co-pays or have co-insurance, or have limits on their benefits, or not. This is financial, and is very important. The other, however, is whether some people have coverage that gets them better health care. This is not OK. Obviously, they come together at some point since health care that is unaffordable to a person is unavailable to them, even when it is necessary. Conversely, for those executive physicals, providing a �benefit� that the individual does not have to pay for encourages them to seek unnecessary, and sometimes potentially harmful, care.

It may be that there are certain kinds of �health care� that are in fact reasonable to treat as elective consumer goods which a company might offer to some employees and not others; cosmetic surgery is the classic example (or non-medically-necessary contact lenses or radial keratotomy [Lasik�]; see Rand Paul on health policy: small brain and no heart, September 1, 2013). There also may be some employees for whom the harm/benefit ratio makes certain services of value when it does not for others (the comprehensive exams, �physicals�, for pilots, or Pap smears for women but not men). But, overall, coverage that does not include all necessary care for everyone is inappropriate. In addition, coverage of unnecessary care is as well. It is not Cadillacs vs. Chevies, or Volkwagens vs. Mercedes; it is making sure that everyone is covered for their health care needs. Like every other OECD country does. Like we could do if everyone was in Medicare.

Then instead of buying their executives �Cadillac health plans� to demonstrate how important they are, these companies can just buy them Cadillacs.