What’s In A Name? Possibly the Future of American Healthcare

Photo by dbking via flickr.

Recent news about House GOP efforts to push through a bill nicknamed the “Repealing the Job-Killing Health Care Law Act” that would scale back healthcare reform has reminded me of a passage from Shakespeare’s Romeo and Juliet:

“What’s Montague? it is nor hand, nor foot,
Nor arm, nor face, nor any other part
Belonging to a man. O, be some other name!
What’s in a name? that which we call a rose
By any other name would smell as sweet;
So Romeo would, were he not Romeo call’d.”

So Juliet Capulet reasons through her love for Romeo Montague, who comes from a rival family, and suggests the two set aside their family names and rivalries for the sake of their love.  Okay, so the situation here isn’t quite the same and I daren’t suggest that certain political characters set aside their rivalries for the sake of the American people’s health and well-being (although, heaven forbid, it might be in our best interest!).  Yet the discussion of names — in terms of how the people associated with them can bring us together or tear us apart, branding, and even media spin — seems appropriate for our current political and social climates.  Starting with the Protected Patient Affordable… wait, errr… Obamacare… no, wait, got it, the Patient Protection and Affordable Care Act, also known as the “Affordable Care Act.”

In “Why The Affordable Care Act Needs A Better Name: ‘Americare’” (Health Affairs, August 2010), William Sage, vice provost for health affairs at UT-Austin, makes the most sensible suggestion of rebranding the healthcare law so it “become[s] something that beneficiaries would not only accept, but would also defend.”  Professor Sage proffers “Americare” as a name that:

would assert a collective interest in health system value and efficiency. It would build courage to do more than tinker at the margins with new payment methods, organizational structures, and professional skills. Most important, a shared identity would signal our decision to rein in special interests and begin a social conversation about redesigning health care delivery to produce the most cost-effective results.

Promoting a new name that fosters a collective identity — and, furthermore, that is catchy and inspiring — is not only sensible, but obvious (consider the “No Child Left Behind Act” — the policy may have its critics, but the name sure is catchy and who would argue in favor of leaving a child behind?).  So obvious, in fact, that I don’t know how the healthcare reform proponents missed the boat (Professor Sage considers three reasons why), because their opponents not only caught the boat, but started steering it right at them:  “Obamacare” (which, even if you believe it’s a friendly term (and I don’t), still focuses on the individual - the President - rather than the collective health of the American people), ”death panels,” and the “Repealing the Job-Killing Health Care Law Act.”

The AP recently reported on some statistics forecasting healthcare-related job losses that are wildly circulating around our nation’s capital.  The nonpartisan Congressional Budget Office (CBO) projected that the current healthcare law “will reduce the amount of labor used in the economy by a small amount –roughly half a percent– primarily by reducing the amount of labor that workers choose to supply” because people won’t be trapped in a job just to get the health benefits.  A recent report by House GOP leaders has cited the CBO projections and has interpreted them to mean some 650,000 jobs could potentially be in jeopardy.

Yet far from cutting the number of available jobs, the current law enables people to voluntarily leave the workforce (by retiring earlier) or continue to work in less demanding jobs.  AP reporters found that:

the law’s penalties on employers who don’t provide health insurance might cause some companies to hire fewer low-wage workers, or to hire more part-timers instead of full-time employees…. But the main consequence would still be from more people choosing not to work.

So what has the CBO (actually) said about the “Repealing the Job-Killing Health Care Law Act” (before more numbers start wildly circulating)?  In a letter to Speaker of the House John Boehner, the CBO analyzed, among other things, the bill’s potential impact on federal budget, discretionary spending, and the number of insured.  With respect to the effects on the number of insured, the letter states that under the bill:

about 32 million fewer nonelderly people would have health insurance in 2019, leaving a total of about 54 million nonelderly people uninsured. The share of legal nonelderly residents with insurance coverage in 2019 would be about 83 percent, compared with a projected share of 94 percent under current law (and 83 percent currently).

That projected difference of 32 million in the number of uninsured people in 2019 reflects a number of differences relative to circumstances under current law. Approximately 24 million people who would otherwise purchase their own coverage through insurance exchanges would not do so, and Medicaid and the Children’s Health Insurance Program would have roughly 16 million fewer enrollees. Partly offsetting those reductions would be net increases, relative to the number projected under current law, of about 5 million people purchasing individual coverage directly from insurers and about 3 million people obtaining coverage through their employer.

Even if the Senate doesn’t approve the bill, CNN reports that healthcare law opponents, such as House Majority Leader Eric Cantor (R-VA), promise to, at the very least, defund and delay healthcare reform provisions.  Either way, healthcare law proponents must rethink their campaign to maintain (or rally, depending on how things go) support among the American people…  starting with an inspiring, new name.

(My thanks to my dad for emailing me the AP article that inspired this post and to Kate Greenwood for directing my attention to Professor Sage’s article).

Health Care Reform Law: Help for Hospitals?

Photo by James Jordan via Flickr

Last week, Samuel Maizel, a bankruptcy lawyer specializing in representing health care businesses in distress, gave a great talk here at Seton Hall Law on “Hospitals in Crisis: Debt Restructuring Options & Issues for Financial Survival.”  Mr. Maizel painted a grim picture of the financial pressures facing hospitals and said he does not believe the situation is going to improve in the near term despite the overall economic recovery.

Near the end of his talk, Mr. Maizel told us that hospitals across the country are combing through the health reform legislation looking for anything that could improve their bottom lines.  This piqued my interest and made me wonder what they will find.  Using the House Committees’ summary of the provisions in the bill relating to delivery system reform as a guide, I came up with the following.

Sec. 3001.  Rewarding High-Quality and Efficient Care.

This provision, which applies to patients discharged on or after October 1, 2012, establishes “value-based purchasing,” meaning that the government will make “value-based incentive payments” to hospitals that provide care to Medicare patients that meets or exceeds certain performance standards to be established by the Secretary of Health and Human Services.  Initially the standards must relate to at least the following five conditions: heart attack, heart failure, pneumonia, surgery, and healthcare-associated infections.  Eventually (by fiscal year 2014) the standards are to incorporate “efficiency measures,” that is Medicare spending per beneficiary must be a factor.

Sec. 3022.  Medicare Shared Savings Program.

This provision, which Jordan Cohen analyzed at length here, directs the Secretary of Health and Human Services to establish a program by January 1, 2012 through which accountable care organizations that save Medicare money would be entitled to a cut of the savings they achieve.  Hospitals are eligible to participate in the program through a partnership or joint venture arrangement with physicians or as employers of physicians.

Sec. 3023.  National Pilot Program on Payment Bundling.

Under this 5-year long pilot program, which the Secretary must establish by January 1, 2013, the government will make one bundled payment “for integrated care during an episode of care provided to an applicable beneficiary around a hospitalization in order to improve the coordination, quality, and efficiency of health care services.”  Episodes of care begin 3 days prior to hospitalization and end 30 days after discharge.  Hospitals can apply to participate in the program (and/or submit a bid) as part of “[a]n entity comprised of … a hospital, a physician group, a skilled nursing facility, and a home health agency.”

While the above three provisions hold out hope of improvement to hospitals’ bottom lines, the House Committees’ summary also highlights two provisions which establish negative incentives.  Section 3008 on Hospital Acquired Conditions provides that, beginning in fiscal year 2015, the government will cut by 1% the payments it makes to hospitals in the top quartile for hospital acquired conditions.  Similarly, Section 3025, the Hospital Readmissions Reduction Program, provides that, after October 1, 2012, the government will begin reducing the amount it pays to hospitals with “excess readmissions.”

Health Reform, “Death Panels,” & Section 1182–What the Text Really Says

Photo by Cathologiccga

This post is a follow-up to my prior post on the Patient-Centered Outcomes Research Institute, a nonprofit corporation created by the Patient Protection and Affordable Care Act (the Health Reform Law), which will oversee comparative clinical effectiveness research–or, in Palin-ese, “the Death Panel.” The pertinent text of the law under which the Institute will operate appears below along with explanation in the plainest English available.

LIMITATIONS ON CERTAIN USES OF COMPARATIVE CLINICAL EFFECTIVENESS RESEARCH

Sec. 1182. (a) The Secretary may only use evidence and findings from research conducted under section 1181 to make a determination regarding coverage under title XVIII if such use is through an iterative and transparent process which includes public comment and considers the effect on subpopulations.

• TRANSLATION: Must be open and transparent and must consider effect on particular groups, but can use research to make determinations regarding coverage

‘(b) Nothing in section 1181 shall be construed as–

‘(1) superceding or modifying the coverage of items or services under title XVIII that the Secretary determines are reasonable and necessary under section 1862(l)(1); or

‘(2) authorizing the Secretary to deny coverage of items or services under such title solely on the basis of comparative clinical effectiveness research.

• TRANSLATION: Coverage cannot be based solely on CER

‘(c)(1) The Secretary shall not use evidence or findings from comparative clinical effectiveness research conducted under section 1181 in determining coverage, reimbursement, or incentive programs under title XVIII in a manner that treats extending the life of an elderly, disabled, or terminally ill individual as of lower value than extending the life of an individual who is younger, nondisabled, or not terminally ill.

• TRANSLATION: CER cannot be used to assign a  lesser value to extending the life of the elderly, disabled or terminally ill (as compared to the younger and healthier) in regard to treatment. Health care dollars cannot be allocated first (or exclusively) to young and relatively healthy individuals under the rationale that extending the lives of the younger and healthier is, by definition, more valuable. The issue is further explored in 1182(e), discussed below. 1182(e) further limits the use of such valuations with regard to the Quality Adjusted Life Year.

‘(c)(2) Paragraph (1) shall not be construed as preventing the Secretary from using evidence or findings from such comparative clinical effectiveness research in determining coverage, reimbursement, or incentive programs under title XVIII based upon a comparison of  the difference in the effectiveness of alternative treatments in extending an individual’s life due to the individual’s age, disability, or terminal illness.

• TRANSLATION: When evaluating treatments to extend an individual’s life, CER can be used to determine whether Medicare will cover one  treatment rather than an alternative. Specifically, an individual’s age, disability, or terminal illness can be a factor in deciding which treatment will be covered, reimbursed and/or incentivized.  For example an elderly person with severe coronary artery disease may have two treatment options: surgery (e.g. revascularization) or drug therapy. Both of these treatments would theoretically extend the life of the patient by reducing the odds of a heart attack or stroke. However (hypothetically) CER data may demonstrate that an individual of advanced age lives longer on average if they opt for drug therapy. In such a circumstance, this section provides that CER data may take into account the individual’s age, disability and terminal illness when comparing two alternative treatments. It may also be the case that CER data shows that individuals with certain disabilities are less likely to respond to surgery or to different treatment, possibly due to immobility, or even impending death. Again, these facts can be taken into account in the CER calculus.

‘(d)(1) The Secretary shall not use evidence or findings from comparative clinical effectiveness research conducted under section 1181 in determining coverage, reimbursement, or incentive programs under title XVIII in a manner that precludes, or with the intent to discourage, an individual from choosing a health care treatment based on how the individual values the tradeoff between extending the length of their life and the risk of disability.

• TRANSLATION: The Secretary cannot use CER to deny or try to persuade a patient from choosing a treatment that may prolong their life but leave them severely disabled. Alternatively, the Secretary cannot prevent a patient from choosing a treatment which may improve the quality of their life, as opposed to an alternative treatment which may extend the length of life.

‘(2)(A) Paragraph (1) shall not be construed to–

‘(i) limit the application of differential copayments under title XVIII based on factors such as cost or type of service; or

• TRANSLATION: The extant differential copayment guidelines are unaffected. 

‘(ii) prevent the Secretary from using evidence or findings from such comparative clinical effectiveness research in determining coverage, reimbursement, or incentive programs under such title based upon a comparison of the difference in the effectiveness of alternative health care treatments in extending an individual’s life due to that individual’s age, disability, or terminal illness.

• TRANSLATION: See 1182(c)(2) discussed above.

‘(3) Nothing in the provisions of, or amendments made by the Patient Protection and Affordable Care Act, shall be construed to limit comparative clinical effectiveness research or any other research, evaluation, or dissemination of information concerning the likelihood that a health care treatment will result in disability.

• TRANSLATION: This section is straightforward. The Institute can compare various treatments and determine which is more likely to result in a disability, and disseminate those findings.

‘(e) The Patient-Centered Outcomes Research Institute established under section 1181(b)(1) shall not develop or employ a dollars-per-quality adjusted life year (or similar measure that discounts the value of a life because of an individual’s disability) as a threshold to establish what type of health care is cost effective or recommended. The Secretary shall not utilize such an adjusted life year (or such a similar measure) as a threshold to determine coverage, reimbursement, or incentive programs under title XVIII.’

• WHAT IS A QALY?: The Quality-Adjusted Life Year (QALY) is defined by the NIH as:
  • (1) A unit of measure of utility which combine life years gained as a result of health interventions/health care programs with a judgment about the quality of these life years.
    (2) A common measure of health improvement used in cost-utility analysis, it measures life expectancy adjusted for quality of life. (See NIH’s Health Economics Information Resources, Glossary, at http://www.nlm.nih.gov/nichsr/edu/healthecon/glossary.html#QALY)
• The goal of the QALY is to ensure that healthcare resources are allocated in a manner which is most beneficial. Because healthcare resources are scarce, however, the $/QALY looks to allocate those resources economically. The QALY ipso facto discounts the value of life due to a disability. This is because the QALY works by assigning different states of health along a continuum, with perfect health being 1 and death being 0. The QALY is interested in whether different treatments provide more QALYs, In other words, QALYs are interested in whether one treatment provides more years at a better state of health (i.e., closer to 1) than another treatment. See M. Weinstein, Spending Health Care Dollars Wisely: Can Cost-Effectiveness Analysis Help? (2005)

• TRANSLATION: The Institute cannot utilize a $/QALY ( or a similar measure) as a threshold to establish what treatment is cost-effective, recommended or incentivized. (It is, however, noteworthy that in describing “similar measure,” both “age” and “terminal illness” are not expressly excluded as prohibited criteria in the development of a metric, as they are throughout the text of other portions of the provision).

• Note: 1182(c)(2) does allow for a disability to be taken into account when comparing various treatments for an individual. That section must be distinguished from the current section (1182(e)), where the upshot is that the dollar valued QALY cannot be a benchmark by which to allocate resources. If we are only determining which of two resources to a given individual shall be reimbursed, then the individual’s disability may be taken into account, i.e., treatment effectiveness under the individual’s circumstances  is a metric for which CER may be utilized; however, dollar value of life quality is not a permitted metric or criteria for treatment.

Comparative Effectiveness Research Under Health Reform, “The Institute”

Image by nick.garrod via Flickr

“Bend the cost curve” has been the mantra of many students of health care reform. The Dartmouth Health Atlas has shown that up to 1/3 of care may be unnecessary. But how do we find out what care is unnecessary? One tool that holds promise is comparative effectiveness research.   Now that health reform has been signed into law, there is greater certainty as to the future of comparative effectiveness research (CER). The Stimulus bill had already allocated $1.1 billion dollars to investigate CER. The newest health reform law continues to build on that start. So what about HR 3590, also known as the Patient Protection and Affordable Care Act? Will they ration care? Pull the plug on your grandmother? Get between you and your doctor? To start answering these questions, I will provide a brief overview of CER under the new law, and describe the law’s vision for a new institute for CER research.

Part D of  H.R. 3509 is entitled “Comparative Clinical Effectiveness Research.” Section 1181 of  Part D defines CER as: “research evaluating and comparing health outcomes and the clinical effectiveness, risks, and benefits of 2 or more medical treatments, services, and items described in subparagraph (B).” Subparagraph B goes on to describe various services and goods associated with health care.

The Institute
Section (b) of 1181 is where the rubber hits the road. Under this this section, the law creates a nonprofit corporation to be called the “Patient-Centered Research Institute,” known as “the Institute,” which is neither an agency nor establishment of the United States. This is rather interesting, and I did not know that our federal government created such corporations, but I suppose it could be compared to a nonprofit Amtrak.

Funding
The Institute will be backed by a Trust Fund created by money transferred from the Medicare Part A and B trust fund. It will receive, for year 2013, an amount equal to 1$ multiplied by the number of individuals entitled to benefits of Medicare Part A or enrolled under Part B. For years 2014 through 2019 the multiplier is $2.

The Purpose and Duties of the Institute
The purpose of the Institute is stated as what amounts to the typical reason for CER: making better health care decisions based on the evidence.

The duties of the institute are listed as:

1. Identifying and adopting (by majority vote within the Institute) research priorities and establishing research project agenda
2. Carrying out research project agenda by doing
   1. Systematic reviews of previous (and future) research (often known as meta-analysis), and
   2. Primary research including randomized clinical trials. The primary research the Institute conducts can be subcontracted to other institutions, under certain constraints.
3. Data collection from various electronic sources like those at the Center for Medicare and Medicaid Services.
4. Appointing expert advisory panels for clinical trials
5. Supporting patient and consumer representatives
6. Establishing a methodology committee to study new ways to measure and conduct CER.
7. Providing a peer-review process for primary research conducted by the Institute. Notably, if the Institute subcontracts, they can use the peer-review process of the organization to which they contract with.
8. Release of research findings to clinicians, patients, and the general public. The Institute must also release an annual report.

Governing in the Institute
The Institute will be run by a Board of Governors. The breakdown of the Board of Governors is quite interesting, and possibly telling:

• The Director of the Agency for Healthcare Research and Quality
• The Director of the National Institute of Health
• 17 members appointed by the Comptroller General of the U.S. The 17 members must be composed of:
  • 3 members representing patients and health care consumers.
  • 5 members representing physicians and providers, including at least 1 surgeon, nurse, State-licensed integrative health care practitioner, and a representative of a hospital.
  • 3 members representing private payers, of whom at least 1 member shall represent health insurance issuers and at least 1 member shall represent employers who self-insure employee benefits.
  • 3 members representing pharmaceutical, device, and diagnostic manufacturers or developers.
  • 1 member representing quality improvement or independent health service researchers.
  • 2 members representing the Federal Government or the States, including at least 1 member representing a Federal health program or agency.

This very well may be one of the handouts that the Senate provided Big Pharma and device manufacturers to get them on board. Remember that CER may very well show that a drug that a company has invested hundreds of millions of dollars in turns out to be ineffective when compared to its competitor. Thus, it is not surprising, for the cynics among us, that the Board has at minimum 3 industry reps from pharma and devices while there is a minimum of only 1 doctor. You start to wonder why the AMA supported the bill if physicians are only guaranteed 1/17th of the positions. After all, it is undeniable that physicians will be interacting with the CER data more than anyone, and they have on the ground experience using CER and related decision aids like Clinical Practice Guidelines.