Taking Steps Toward Reform

Should an imperfect health reform bill be passed?  Health reform should be about four things: 1) expanding coverage to all; 2) providing health security for those already insured; 3) ending the fragmentation of health care delivery in favor of sound coordination of care; and, 4) constraining cost to ensure that we can afford appropriate care in the future.

The House leadership bill (HR 3962) does a good job on the first, reaching a large proportion of the uninsured — although it will not achieve universal coverage.  It also gets good marks for reforming insurance regulations — although its weak version of the public plan will make true insurance reform more difficult to achieve.  It makes some tentative progress on care coordination, mostly through pilots and demonstrations in public insurance programs.  It provides some cost saving measures in Medicare and through encouraging alignment of financing systems — but cost containment is clearly the weakest aspect of the bill.   So, should the reform be passed, warts and all?

After months of criticism of the majority’s plans and promises of the production of a better plan, House Republicans proposed a substitute to the House leadership bill.   How does it stack up?  The CBO finds that the Republican substitute would reduce the deficit over the next ten years by about $68 billion, which is about $40 billion less than the reduction the CBO projects from the Democratic version.   The CBO also estimates that the Republican bill would reduce the number of uninsured over the next ten years by “about 3 million relative to current law, leaving about 52 million nonelderly residents uninsured,”  compared with its assessment that HR 3962 would reduce the number of nonelderly uninsured by 36 million during that time period.  So, the GOP substitute would do less to reduce the deficit, and cover 33 million fewer uninsured.   It includes some insurance reform provisions, many based on consumer-directed models that tend to further fragment, rather than coordinate care.  HR 3962 is far from perfect, and the CBO’s estimates have been subject to criticism, but the reports provide food for thought for those who hoped that the Republican plan would offer a meaningful alternative.

Sometimes proceeding in steps is necessary, particularly with complex systemic reform.  Massachusetts has in many ways been a model for drafters of federal reform plans, and stands as an example of incremental steps toward full reform.  It enacted sweeping health insurance reforms in 2006, creating a marketplace for regulated private insurance, the addition of public plans, and responsibility shared among businesses, individuals, and providers.  It has been remarkably successful at expanding access, driving the uninsurance rate down to 2.6% as of the spring of this year, and enjoying continuing strong support within Massachusetts.    Costs are a growing concern.  But the coalition of business, consumer, and provider groups behind the reform anticipated the need to circle back and tackle finance.  Cost concerns have only grown with the economic downturn, as tax receipts lag and countercyclical demand for Medicaid coverage strains budgets.  Resolve to push forward appears strong.  Representatives of several stakeholders reported last year that,

Since passage, all stakeholder groups have remained deeply engaged in implementation.  Despite news reports of higher-than-expected costs, the governor, legislative leaders, and stakeholders have repeatedly reiterated support for full implementation.  This consensus, crucial to enactment, has proved equally vital to implementation.

Massachusetts reformers made the decision to proceed in two steps: coverage first, cost control second.   While no one is proposing a two-step process for federal reform, expanding coverage and reforming insurance practices have been the overriding emphases in Washington.  And HR 3962 does advance the cause of care coordination for the chronically ill.  It was interesting to see the Dutch Health Minister in a recent interview emphasize coordinated care as a central feature of reform.  In describing his country’s reforms (from which some draw lessons for our country), he explained:

We are trying to make sure that no one receives health care that is not coordinated. And [we intend] that the general practitioners cannot negotiate any longer with insurance companies unless they are part of a coherent group that is offering coherent care.

What does the GOP bill do for people with chronic illness?   The CBO found that provisions in the proposed substitute would “tend to increase the premiums paid by less healthy enrollees.”   The substitute, then, entails fiscal benefits for the well at the expense of those who most need care and coverage.

HR 3962 reforms the insurance market to safeguard coverage for those who have it now; expands coverage for the uninsured; and begins the arduous task of shifting care delivery from fragmentation to coordination.  The GOP alternative covers one-twelfth as many uninsured, makes coverage for the chronically ill harder to maintain, and does less to reduce the deficit.  Common sense tells us that taking positive steps toward reform is vital, and that the GOP substitute is no reform at all.

Primary Care: Proper Implementation Crucial to Successful Health Reform

In reference to the House Bill, a recent post at The Health Care Blog stated that:

A big reduction in the number of uninsured with no new controls over costs carries its own risk. As Massachusetts–even with only a modest percentage increase in its covered population–discovered, making health care more accessible means a jump in demand, but with no corresponding increase in supply. The predictable results: higher prices and disenchanted consumers unable to obtain care.

This comment raises two interesting points, namely, how will the House bill  affect the demand for, as well as the supply of, health care? The health reform measures in Massachusetts have notably not included a public plan similar to the latest version of the House bill.  Ergo, a comparison of the House bill to the Massachusetts reform measures isn’t exactly comparing apples to apples. In Massachusetts, the private insurers do not have to worry about consumers (who are often simultaneously employers) choosing a public plan. However, in the House bill, this option will, theoretically, increase competition by making the private insurers work to keep their customers from going over to the public plan.  Thus, the addition of  a separate actor–in contradistinction to the MA plan–may lead to decreased cost, a trend I explored in a previous post.  Therefore, Roger Collier’s claim in The Health Care Blog that there will be no cost controls isn’t entirely correct if the public plan fosters competition sufficient to force private insurers to lower the costs of their own plans.

If the price does in fact decrease, demand will then (presumably) increase, and this is when we will encounter the real elephant in the room: supply.  It’s not the relationship between the public plan’s increase in demand that we should worry about, but rather it’s the relationship of it to the present supply. Thus, Collier may be on to something with regard to the inability to obtain care; however, he fails to point out why there may be a supply problem, and the problem is fairly obvious: the massive primary care supply shortage. As the President-elect of the American Association of Family Physicians  noted:

“Primary care has been described as the base of the health care workforce pyramid,” said Heim, who spoke during a hearing on physician workforce shortages. “But the U.S. physician profile is only 31 percent primary care and 69 percent (sub)specialty care.”

The pyramid metaphor has been mentioned by others. It describes a health care system as a pyramid whose base comprises basic health care delivery by primary care, which is the least costly, and which tapers to the more specialized care that is more costly, such as organ transplantation. At this point, our health pyramid is inverted. One need not have taken college level physics to appreciate that  an inverted pyramid’s center of gravity makes it prone to toppling. We also have a second pyramid–a socioeconomic pyramid–with a largely solidified base of lower-income Americans, tapering to the middle class and then rising to the upper income tier at the top– or pinnacle. Imagine these pyramids are side-by-side, yet one is inverted. Congress’s job is to make sure that these metaphorical pyramids co-exist stably. The picture above may be of some help.

The authors of the House bill were not oblivious to the teetering health care pyramid, and added specific provisions that they believed would ameliorate the growing problem. As MedNewsToday pointed out, the bill attempts to combat the shortage by:

• Increased Medicare payments to primary care physicians by 5%
• An additional 5% pay boost for primary care doctors in designated “health shortage” areas
• A restructured formula for calculating Medicare reimbursements each year
• Enlargement of the National Health Service Corps by “an amount sufficient to eliminate 40% of the estimated shortfall in primary care providers”
• New scholarships for medical students who choose primary care as a specialty

Luckily, the House bill has focused to some extent on the most important aspect of the primary care shortage, that of recruiting more students to enter primary care. Enlarging the National Health Service Corps is laudable (notably, Dr. Regina Benjamin, recently named by Obama to the Surgeon General post, is a former participant in the program), and would likely be helpful, but increasing it by an “amount necessary” to reduce a predicted short fall is somewhat amorphous. Also, the National Health Corps and the scholarships associated with them are offered in return for serving in certain areas that have shortages of services but these areas of need will almost certainly expand and alter as coverage is drastically expanded across the nation.

Thus, increasing the number of primary care physicians would in no way be a panacea– a point that is  highlighted by Atul Gawande’s New Yorker article. As the article made clear, health care delivery can be hamstrung after access is provided. I believe this underscores a point that many have noted, that is, that there is a difference between an increase in coverage (i.e. insuring more individuals) and health care reform (making sure that care is delivered effectively and efficiently).

Assuming that medical students are sufficiently enamored by the pay adjustments and scholarships –which is a big assumption–reforming how those new primary care physicians deliver care in response to increased demand is as important as increasing the supply.

Mergers In State Health Reform: Increased Efficacy or More Bureaucracy?

State Delegate Don Perdue told the The Herald-Dispatch, “Health reform has been tried a number of times.  It fails because one agency is not talking to another, because the vision somewhere gets lost in the process.”  One might imagine Delegate Perdue to be referring to health reform in just about any state– and even the federal government.  Are West Virginia legislators so far ahead of our representatives in Washington?  Hopefully not.  As our blog reported last week (Obama Officially Establishes White House Office of Health Reform), President Obama recently signed an executive order with an arguably similar purpose: work with several federal executive branch agencies, states and local officials, and Congress to enact health reform and develop and implement strategic initiatives to strengthen the performance of the health care system.

In Massachusetts, Governor Deval Patrick isn’t having as much luck.  The Boston Globe reports of a letter the Governor wrote to the chair of the state’s Health and education Facilities Authority (HEFA) instructing the agency to merge with the state’s Development Finance Agency by July 1, 2009.  The Governor’s office maintains that the merge will enhance HEFA’s ability to provide tax-exempt financing for hospitals and health facilities (as well as state educational institutions).  Critics see the attempt as a “power grab” and an attack on the safeguards that keep HEFA, and other quasi-public authorities like it, safe from political pressure and “gubernatorial interference.” Read more