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Does Lying Make Healthcare Simpler?

July 1, 2017 Leave a comment

Earlier this year, the President admitted that healthcare and healthcare reform are complicated.

The House of Representatives passed the American Health Care Act in May as its repeal and replace Obamacare offering to America. The Congressional print of the Affordable Care Act when finally passed as amended was over 900 pages; the AHCA came in at 130 pages — certainly, an attempt at a simpler healthcare environment.  The President described the AHCA as a “mean” and “cold-hearted” “son of a bitch.”

The Senate GOP leadership then proposed in June its Better Care Reconciliation Act of 2017.  If the number of pages makes a difference, the Senate’s bill, at 145 pages, is a little less simple than the House’s AHCA, but still much simpler than Obamacare.  The additional pages used in the Senate proposal, unfortunately, did not make the Better Care Act less mean — actually, the consensus is that the Better Care Act is “meaner” than the AHCA. The national negative reaction, along with a number of GOP Senators being unable to vote for the bill, resulted in the vote being postponed until later in July.

After the Senate vote was delayed, the President met with the GOP Senators at the White House for a pep talk of sorts, telling them that “This will be great if we get it done and if we don’t get it done it’s going to be something that we’re not going to like and that’s OK and I can understand that.” According to the President, “We have given ourselves a little bit more time to make it perfect.”

Then, in the hours that followed, the President forgot about healthcare’s complexity and focused his efforts on misinformation and misdirection.  When congratulating the Cubs  on their World Series victory, the President told reporters that “We’re going to have a big surprise. … We’re going to have a great, great surprise.”  The next day the President posted the following Tweet at 3:37 a.m., which I suppose was the surprise: “If Republican Senators are unable to pass what they are working on now, they should immediately REPEAL, and then REPLACE at a later date!”

Repealing Obamacare is extraordinarily complicated and would hurt many people — is the Senate, whose GOP members can’t muster 50 votes to pass an arguably harsh repeal and replace bill, able to get enough votes to pass a much harsher repeal bill?  Will Senators agree to repeal all protections for people with pre-existing conditions, and take away the right of adult children to stay on their parents’ insurance until they are 26, and terminate accountable care organizations, and rollback all Medicaid expansion and marketplace health plans, and stop all subsidies to people, and on and on?  Yes, repeal would attract the more conservative Senators, like Paul and Cruz, who want Obamacare and its regulations repealed, but would be opposed by many moderate Senators, like Collins, Capito, and Heller, who remain concerned about the negative impact on their states if Obamacare is drastically changed.

Statements by the President and GOP Senators and House members about the death of Obamacare, its imminent collapse and implosion, are the lies that have fueled the rush to repeal and replace.  These lies have been debunked by the CBO.  The challenges faced by Obamacare are largely because the GOP has refused to help fix the problems because  it and its members’ supporters (i.e., the insurance companies and the pharmaceutical industry) would rather go back to the ways things were by repealing Obamacare.

It is lie is that Obamacare is bad and must be repealed because of the collapsing insurance markets and the increasing premium costs.  Despite its flaws, Obamacare extended coverage, made sure that the sickest segments of our population would still be able to get affordable insurance, forced the insurance companies to actually spend their premium dollars on the health of their insureds, and required that all policies provide certaIn basic benefits so that the insureds actually had coverage after paying premiums.  If Obamacare had been allowed to work the way it was supposed, the individual and employer mandates would have made the pool of insureds bigger and reduced the rate of increase of premium costs.

It is a lie that the insurance markets are collapsing.  Insurers are dropping out of the markets because of their losses (i.e., reduced profits).  For years insurers have enjoyed artificially inflated profits by unilaterally reducing payments to physicians, hospitals, and other healthcare providers, by shifting the risk of insurance to the providers, and by denying benefits to insureds.  Obamacare required these insurers for the first time in a long to actually provide insurance, pay claims, and accept the risk of covering their sick insureds whose money they took for so long.  Insurers should never have been allowed to withdraw from the markets or a public option should have been provided — in any event, the struggle of the markets was orchestrated by insurance companies themselves, aided and abetted by the a GOP who refused to make necessary changes to Obamacare to address these problems.

A related lie is that things will be fine once we allow capitalism and the free market to work.  Who believes this?  Obamacare was the result of an out of control insurance industry abusing its customers in the manner described above.

The Wall Street Journal supports the Senate bill. In an editorial last week, the WSJ said “Repairing the failing individual insurance market, putting Medicaid on budget for the first time in the entitlement’s history, and passing an enormous pro-growth tax cut are historic opportunities.”  Do not ignore the fact that “putting Medicaid on a budget” means less or no care for people getting healthcare now or who will need it in the future.  If rationing healthcare is the goal, then state it plainly and let Americans decide if they ate prepared to have someone decide whose child goes without vaccines, whose grandmother is thrown out of the nursing home, and whose spouse with breast cancer goes untreated.  And this is the underpinning of another lie — the GOP has been telling us that its repeal and replace bills will improve healthcare for Americans.  However, the bills have nothing to do with healthcare other than to reduce its availability and affordability.

The biggest lie of the President and the GOP is that their proposals are what the people want and what they promised when they ran for election.  The great unpopularity of the GOP’s bills demonstrates that those bills are not what people who need health insurance want.  More important, the disconnect between the popular election rhetoric of repeal and replace and the dissatisfaction that voters express when presented with the effects of the GOP’s efforts at repealing and replacing shows that most Americans’ knowledge of Obamacare is still based on the 8 years of lies that the GOP has been telling about it — and continues to tell.

So, even though all of us know that healthcare is complicated, the President appears  convinced that lying will make it simpler and make it easier to tell the Trump core that another promise has been kept.  Making healthcare better should be about more than checking boxes on a list.

 

 

 

Saving the Medical Profession

March 23, 2016 Leave a comment

The following email string from earlier today from physician leaders is very telling and tragic.  The email discussion starts with this:

Many of you will recognize some of the themes in this piece written by a frustrated young physician who has made the tough decision to leave her practice. Some of you might have struggled with the same issues discussed in this essay.

Here are two quotes from her thoughtful essay:

“The phenomenon of patients as customers, the cultural rise of entitled incivility, and trusting Dr. Google more than their doctor has eroded some of the pleasure of patient care.”

“In the past decade, physician groups have been purchased by hospitals and conglomerations. Rather than being recognized for individual excellence by patients voting with their feet, this has resulted in doctors being interchangeable cogs in a system where patients/hour and shifts/month dictate value.”

[go here, to read the article]

Two physicians responded with the following:

As physicians, WE make the wheel go around. Yet we have allowed our knowledge, our expertise, and our unmatched dedication to be devalued by hospitals, insurance companies, politicians, etc.

I think that the more we are called providers and we do not educate the public about the time commitment and education that physicians put in to become the master of the profession then we lose. … medical students are very talented. We need to make this news because we are the only ones who can provide quality care and provide the impetus to decrease costs We are the only ones equipped to do so. The MD degree has tons of value and it is not an interchangeable cog in the wheel.

I responded:

So true.  My law practice focuses on representing physicians, which includes helping them evaluate and participate in opportunities as they deal with the onslaught of onerous laws, rules, and regulations. I constantly must remind my clients that physicians are and remain the sole source of value in healthcare. Notwithstanding that, many physicians, young and old, constantly ignore good opportunities for their practices because they are intimidated into choosing the wrong ones.

As the public member on the Board of Governors of the Florida Medical Association, I am pleased at the FMA’s focus (1) on lobbying legislators who are notoriously ignorant about physicians and the practice of medicine, and (2) on educating its members so that they can better understand and evaluate what is going on in the business of medicine.

I worry whether we can make a big enough impact quickly enough.

No other profession is faced with less respect or more demands or higher expectations than allopathic and osteopathic physicians.

This is not about “socialized” medicine, Obamacare, or anything other than  economics.  It has always been about the money.  We are happy to make physicians work harder for less, and that has been happening for years.  People don’t care because they have drunk the Kool-Aid from the insurance companies and the government that the  medical profession is the problem with healthcare, and a misinformed public accepts the view that somehow physicians are the enemy.

The Healthcare Marketplace — There is No Invisible Hand (until when consumers start paying)

October 26, 2015 Leave a comment

The Tampa Bay Times included on its front page this morning an article entitled: “Big swings in medical prices make for a wild market, but savvy patients can benefit”

“It is a chaotic landscape, which is why it is so difficult for consumers and employers to navigate,” said Castlight vice president Kristin Torres Mowat.

So what gives?

For one, the market for health care doesn’t behave like most other markets. Consumers usually don’t know how much a procedure costs until after they’ve had it, and it can be challenging to compare prices beforehand. That means providers can set their rates somewhat independently of normal market forces — the forces that keep prices consistent at neighboring gas stations.

Bruce Vogel, an associate professor of health policy at the University of Florida (and a dorm mate at UF many years ago) was quoted in the Tampa Bay Times article — “It’s hard to find a market that deviates more from the perfectly competitive structure.”

Even Florida Gov. Rick Scott, a staunch conservative who opposes most government regulation, has expressed concern over the healthcare marketplace, focusing on the transparency of hospital pricing.  In the September 29 online edition of Florida Politics, Gov. Scott was quoted:

“This is all about patients and empowering patients,” he told reporters after a Florida Cabinet meeting. “They should know what (a procedure) costs and be able to get as much information as they can.”

You can read the Governor’s official statement regarding hospital price transparency and supportive comments from members of the Commission on Healthcare and Hospital Funding here.

Gov. Scott is a smart guy – an M&A attorney, who founded Columbia Hospital Corporation which merged into the Hospital Corporation of America to become Columbia/HCA, of which he was CEO for a number of years (during which time Medicare fraud issues arose). It is not like he does not know how healthcare providers in general, and hospitals in particular, price their services.

Since the advent of third-party payers, healthcare has always been an artificial market. Vendors of healthcare and consumers of healthcare (those with health insurance) have rarely negotiated prices.  The insurance companies negotiated with providers over what they would pay and with the insureds (or their employers) what their premiums would be. Add Medicare to the mix which set an artificial payment standard of some negotiated percentage of the Medicare rate, and pricing for healthcare services became almost completely independent of typical economic forces like supply and demand. Don’t even try to analyze pricing in rural or underserved markets.

So what is happening nowadays, when everyone is supposed to be insured, that makes healthcare pricing and bargaining with hospitals and other healthcare providers such a hot topic?  I think it is because of high deductible plans. Health insurance has basically become insurance only for catastrophic claims. When the family deductible may be $5,000 or more, the cost for “unreimbursed” services becomes a matter of personal economics — even if the provider is charging the rate previously negotiated with the healthcare insurer.

Unfortunately, the negotiating for healthcare services is far more complicated than the negotiating over the price of a car. Transparency in healthcare pricing is important, but transparency in healthcare quality is critical. Quality of care will soon be the dominant factor as we move away from procedure based payment for healthcare services to preventive care services (paid 100%) and bundled/global payments focused on the episode of care.

Adam Smith never had a chance in healthcare.

Advice to Law Students

October 25, 2015 Leave a comment

When I graduated law school in 1981, health law was pretty much nonexistent.  Now, to be relevant, most law schools offer some health law courses.

Because?  Health law is hot.  It was hot before Obamacare, and it will remain hot.

Harvard Law School has its health blog, Bill of Health.  Yale Law School is opening its new Solomon Center for Health Policy and Law next month. U.S. News ranks the country’s top health law programs.

Getting healthy and staying that way is a passion for most Americans. Obamacare has changed the way the country thinks about dispensing health care.  But there will always be sick people. New drugs will be invented, and new procedures adopted.  All to make us healthier or to make us more comfortable in our sickness.  Health care is big business, and, by necessity, will remain heavily regulated.   After all, there will always be patients and providers who will try to game the system.

So, law students, if you don’t know what path to follow, you could do a lot worse than health law

Interpreting Fiorina’s Comments on Vaccination Law

August 16, 2015 Leave a comment

CMS Proposes Significant Changes to the 2016 Medicare Physician Fee Schedule, including to Stark

August 16, 2015 Leave a comment

CMS Factsheet:

“On July 08, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that updates payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2016. This year, CMS is proposing a number of new policies, including several that are a result of recently enacted legislation. The rule also finalizes changes to several of the quality reporting initiatives that are associated with PFS payments, including the Physician Quality Reporting System (PQRS), the Physician Value-Based Payment Modifier (Value Modifier), and the Medicare Electronic Health Record (EHR) Incentive Program, as well as changes to the Physician Compare website on Medicare.gov.”

The proposed rule includes provisions relating to the following;

  • physician quality reporting system
  • “Physician Compare”
  • EHR incentive program
  • Medicare shared savings
  • advance care planning
  • payment provisions on Part B drugs, misvalued codes, RVU reductions, “incident to” services, physician value-based payment modifier, etc.

Perhaps most significant in the area of healthcare business transactions are the physician self-referral (Stark law) updates:

  • expansion of recruitment and retention provisions to NPPs
  • updating physician-owned hospital requirements
  • reducing burdens of technical noncompliance through more reasonable regulations in a number of areas (based on information learned from self-dsiclosures and the rersults of recent cases)

The complete proposed rule as published in the Federal Register on July 15 can be found here.

Comments will be accepted by CMS on the proposed rule until September 8, 2015.

OIG Fraud Alert on Physician Compensation — Why Is No One Listening?

July 11, 2015 1 comment

A few weeks ago, the OIG published another one of its fraud alerts.  This one was entitled, “Physician Compensation Arrangements May Result in Significant Liability.”

Everyone knows (don’t they?) that business arrangements in healthcare have to meet several legal requirements, including: (1) it cannot be based on the value or volume of referrals, (2) it must be at arms’ length, and (3) it must be commercially reasonable.  When a healthcare provider enters into a transaction that violates any of these three requirements, he may have violated the anti-kickback statute or physician self-referral/Stark law or both, and any claim arising from the transaction that is submitted to the federal government for payment may be a false claim.  Healthcare lawyers have long been warning their clients to be cautious about how they pay (and recruit) physician employees and contractors in order to avoid violations of the kickback, self-referral, and false claims laws. Violations carry stiff penalties and in some cases criminal sanctions.

There is nothing new in this recent Fraud Alert.  Many similar fraud alerts and OIG advisory opinions and actual court cases have passed on the same message.  And there is nothing surprising other than that the facts described in this Fraud Alert so obviously violate these healthcare laws that you have to ask, why is no one listening?

I have a three explanations:

  • The false claims act was passed during the Civil War and was aimed at stopping corruption in how defense contractors were paid.  The law made sense.  There was a direct relationship between the defense contractor and the government dollars received.  However, the false claims act makes no sense in healthcare — treating a patient is so separated from payment; the provider at the time of care may not know who is paying — government, commercial, the patient, or no one.
  • The healthcare laws are so contrary to the economic rules that apply to other businesses and so counter-intuitive as to make them offensively ridiculous and begging to be ignored (which they are).
  • As we move to a pay for performance, quality-based healthcare reimbursement system, these laws become even more irrelevant.  Case in point — Accountable Care Organizations — a critical foundation for healthcare reform under the Accountable Care Act.  ACOs could not operate unless waivers to these healthcare laws were implemented.  Every healthcare provider is not in an ACO, but many are developing clinically integrated networks and other arrangements to oversee quality and utilization in order to compete more effectively with large healthcare systems and negotiate with payors in keeping with the goals of healthcare reform.  They are forced to act as if the waivers applied to them also.  In fact many consultants advise that the waivers DO apply to non-ACO networks.

It is time for a thoughtful review (and repeal) of these antiquated and economically debilitating laws in how they apply to healthcare providers.  It is time to stop calling business sensible healthcare transactions fraudulent and punishing the participants.

These laws allow regulators to be lazy and stupid. Anyone can enforce laws based an strict liability or ones that have lines so faint that crossing them is unavoidable.

Seriously, who cares if someone pays a fee for referring a patient for care?  Liability should be based on the quality and necessity of the care.  Providing care not needed or charging for care not given — those actions should be punished.  But that’s harder for regulators, so we continue to vilify healthcare providers and impose burdens on them that are far tougher than the benefits derived.

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