The Next Visionary Entrepreneurs In Health Tech

The Next Visionary Entrepreneurs In Health Tech

For each of the nearly 11,000 health technology companies in the Health 2.0 Source Database, there have been countless more that have failed. Sometimes it’s small companies with good ideas that never quite get off the ground — remember Zeo? — and sometimes it’s big, well-funded experiments that suddenly fall flat, like the recent closing of Qliance. There is no magic formula for success in this industry, and the so-called “graveyard” of health technology companies continues to grow. Yet, somehow, there exists this legion of entrepreneurs that never fails to produce the next passionate CEO willing to reach for those deceptively low-hanging health care fruit.

This year, at Health 2.0’s 11th Annual Fall Conference, the crowd favorite 2 CEOs and a President Panel returns to our main stage. We’ll hear from three visionary entrepreneurs who are tackling three diverse segments of health care: consumer health and wellness, data transparency, and patient education. Saeju Jeong, the CEO of Noom, will share how Noom’s intelligent health coaching apps that focus on fitness and nutrition are staying relevant in a crowded market that includes the likes of tracking giant MyFitnessPal, or the health coaching app Vida. David Vivero, the CEO of Amino, will also appear to discuss how Amino is tackling the long-standing transparency problem in health care by using data to help consumers find better doctors, book appointments, and estimate their costs. Finally, this year’s addition of a president comes in the form of Shradha Agarwal of Outcome Health. The Chicago-based startup has reportedly raised more than $500 million at a valuation of $5 billion, which means we’ll have no shortage of questions for Agarwal about scale, growth, and how Outcome’s patient education technology is actually helping to improve health outcomes.

Register now for the 11th Annual Fall Conference to join us, and to hear these leaders’ stories.

A Line in the Sand

A Line in the Sand

Eventually, the share of the American economy absorbed by healthcare will stop rising. The question is when, and how much more collective damage will be inflicted in the process. As it turns out, there is a solution under our noses that is nearly ubiquitous in business, personal finance, and government programs worldwide. It can be used to bring manageable, relatively predictable transformation, rather than sudden wrenching change. It is a called a “budget.” It is well past time to embrace the discipline of budgets in healthcare financing.

The basic idea is clear: set a limit on how much money can be spent for healthcare. Almost every wealthy nation disciplines its spending with a budget for healthcare expenditures. The United States does not, still retaining for the most part an open-ended model in which rates for individual services are set, without overall limits on what is spent. The discipline brought by budgets allows other nations to spend roughly half what the United States does per person, despite the fact that life and health are valued in France, The United Kingdom, Israel, and Germany no less than in the United States.

Global healthcare budgets aren’t a policy of the left or the right. The use of budgets has become associated with the political right in America, despite the fact that nearly every socialized universal healthcare system in the world has one. The fact that this isn’t about left or right becomes clearer when considering that even in America both sides have advanced their own versions of capping healthcare expenditures by a budgeting mechanism.

The darling of conservatives for over 30 years has been the “block grant” for Medicaid. Starting with the Reagan administration in 1981, the basic idea has been to set a budget for a program according to a formula (say, last year’s cost plus an allowance for inflation). The block grant is given to a state, which then spends the money how it sees fit to accomplish program objectives. Since the state won’t see more dollars simply because providers are billing for more expensive services, or drug prices are increasing, the state has a strong incentive to find ways to manage those costs rather than simply pass most of them on to the federal government under the current system.

There are several problems with the basic block grant design, one of which is that it is not flexible with changes in economic conditions, such as a recession that brings a surge in the needy. To address this limitation, in their most recent proposals to cap the Medicaid program conservatives have adopted a modified approach that sets a spending limit per recipient rather than for the state overall. This is the “per capita” capped model which became the default in both the Ryan plan passed by the House of Representatives in April and the Senate version that came a few votes shy in July. For the per capita cap, the state’s budget effectively goes up in bad times and down in good times, so that the state can focus on how much is spent per Medicaid eligible person.

Seemingly unrelated to the Republican plans, the approaches preferred by progressive policy experts typically goes by the names “global budget” or “global cap.” New York, an azure blue state, has had a global cap for its Medicaid program since 2011. This cap on state Medicaid expenditures has brought great discipline to spending and saved New York taxpayers billions. The cap was part of a larger set of reforms initiated by New York’s Medicaid Redesign Team (MRT) in 2010 during a budget crisis brought on by the unsustainable growth of the Medicaid program. Over 270 of these reforms have been fully or partially implemented as of 2017. The other reforms enabled New York to live within the cap, and the cap in turn helped ensure the continuation of the reforms. The reforms cover benefit designs, rate changes, the expansion of managed care and new reimbursement methodologies, like value-based payment to reward outcomes over the volume of services. Every year new initiatives are proposed to stay within the budget.

And it has worked. Since 2011, New York has increased its Medicaid enrollment by over 1 million people while lowering the cost by about $1,000 per person. For a couple of those years, New York added large numbers of members to its rolls while at the same time lowering total program cost. This is unheard of in American healthcare, and the global cap was essential to making it possible. Lowering cost was temporary, but even now costs are growing much more slowly than prior to the global cap.

Maryland is another blue state that under Democratic leadership embraced global budgeting. Maryland, uniquely, had been living under some version of all-payer hospital rate setting in Medicare for over 40 years. Recently costs started to creep beyond the level approved by CMS, so Maryland moved to adopt true global budgeting to provide additional discipline. The new global budgets continue to set hospital payments for all payers, but they do so at the level of total hospital expenditures for the population, both inpatient and outpatient. Essentially, each hospital is given a pot of money based on its attributed patient population and other factors, and it is up to the hospital to spend it wisely (within limits). The new model produced nearly $116 million in savings in its first year of operation. Potentially avoidable readmissions dropped by 26% (nearly reaching the 30% five-year reduction target in the first year).

In Maryland the all-payer hospital growth rate is set at 3.6%. In New York, the services covered under the global cap are allowed to grow at the 10-year average Medical Consumer Price Index (CPI-M), which is about 3.6% currently. The House ACA-repeal bill capped Medicaid growth at the CPI-M from 2016 to 2019, with up to 1% additional growth allowed, which at current rates would be up to 3.7% annually. The Senate draft bill set the allowed growth rate at CPI-M for those not elderly or disabled from 2020 to 2025, after which it would switch to the general CPI for all urban consumers (CPI-U), which is historically over a percentage point lower.

While the Senate proposal is the stingiest, it’s clear that these caps are not far apart. Other initiatives, such as the all-payer statewide ACO in Vermont, also have growth caps in the range of 3.5%.The rhetoric presented in national debates unfortunately obscures the fact that these targets are closely related. But there’s a good reason they are similar: over the last 10 years GDP grew on average by less than 4% per year. In contrast, the 10-year average growth rate for Medicaid is 5.9% (partly due to Medicaid expansion under the ACA), and the overall growth rate for healthcare in the U.S. over that period was 4.9%. By staying below 4%, all of the proposals would reduce the share of the national economy devoted to Medicaid.

Of course, there are reasons that the rhetoric gets so heated. One of these reasons is that the budget is not created in a vacuum, and policies surrounding the cap can differ enormously. For example, Republicans didn’t just want to limit the rate of growth, they wanted to eliminate Medicaid’s expansion to new populations provided under the Affordable Care Act by slashing the funding available for those individuals, leaving an expected 10-15 million more people uninsured. And for Democrats, that is something worth fighting for.

In a battle to save coverage for millions, from a bill that they had no say in, it didn’t pay to be nuanced and single out parts of the legislation for compliment. But if that battle is over and voices of compromise can be heard, then global budgets provide the most promising path forward. Once on that path, and both parties agree that the solution is not to engage in dramatic cuts to eligibility but instead to reduce federal expenditures in the long term by capping growth, this would still save hundreds of billions of dollars over the next 10 years. There is much that Democrats and Republicans would still need to work out. For example, will states be allowed to pocket savings and not reinvest them into health promoting objectives? Will there be an escape hatch if states find themselves to manage some aspect of their costs (like pharmaceuticals), or even an option to revert to the older model? How much flexibility will states, insurers and providers have under such a system?

Failure is an option, of course. In adopting some version of global budgeting, we need to avoid what happened to the Sustained Growth Rate (SGR) formula in Medicare. The SGR set a growth rate in Medicare fee for service rates pegged to the actual total FFS expenditures in the prior year, but it was a formula that didn’t result in actual budgets. Once the actual reimbursement trend increased faster than the formula allowed, the framing around SGR almost immediately became that it was too harsh. Rather than rebalance rates, the standard refrain became that a “doc fix” was needed. Because the SGR wasn’t a true budget, the cuts it proposed were delayed year after year until eventually the SGR rule itself was rescinded. There are two lessons in this experience. First: guidelines don’t work; true budgets are needed. Second, and even more importantly: you can’t put a cap on just one of the three main pillars of American Health insurance (Medicare, Medicaid, and commercial) without the other two as well. If you’re a physician and your Medicare fees go up 1% every year while your fees for private insurance go up 5% every year, no matter how much more Medicare pays than what is typical in other wealthy nations, it is going to look like a “cheap” payer in the American context.

As some savvy readers of this article have no doubt been objecting for some time, that is also an insurmountable problem with the current Republican proposals to implement a budget-based cap on Medicaid expenditures alone. If Medicaid lives under a fixed budget but Medicare and commercial insurance do not, Medicaid will become even more of the poor-cousin payer. It will create more insolvent safety net hospitals because they are stuck in an environment where they have to compete on salaries, facilities and other matters with richer hospitals in a money-bloated system fueled by Medicare and especially by employer-based commercial insurance. More physicians will drop out of the program because they can be paid a multiple for their time elsewhere and their cost of doing business is in part set by the other forms of insurance.

And so at the same time as Medicaid switches to a capped, budget-based system, Medicare should as well. If Medicare does not follow, the cap in Medicaid will fail, sooner or later. Amazingly, New York Medicaid has been able to continue under a cap for 6 years, while Medicare and employer-based insurance grow with no such constraints. But partly that’s because New York started with one of the richest Medicaid programs in the nation and had room to cut excesses. There has also been an escape valve, in that parts of New York’s program have been outside the cap and allowed to grow at a higher rate, and CMS allowed some of New York’s savings to be recouped through a delivery system transformation program called DSRIP (over $6 billion dollars, in fact). But after 6 years of a global cap for most expenses, the Medicaid program in New York is feeling the strain. The collapse of the safety net provider network is inevitable if New York’s Medicaid program continues to stand alone.

As a bonus, once Medicaid and Medicare are locked together in a capped budget system, the environment will be conducive for employers and individuals who purchase commercial insurance to be open to a similar capped growth system to provide relief, creating an all-payer global budget approach that finally starts to look like the universal healthcare systems of Germany, The Netherlands, Israel, Switzerland and many other nations. (These are not single payer models. Those nations have robust, highly-regulated health insurance markets covering part or all of their health care expenditures.)

So why do budgets work? Normally when CMS or a private payer attempts to control some aspect of healthcare spending, it micromanages part of the delivery of care. Typically, this is effective for a short time until providers figure out a way around the barrier and alter the services delivered, or increase revenue by changing coding practices. But a budget puts an overall constraint on all spending, or a large enough portion of it to effectively prevent gaming.

Global budgets are consistent with many other objectives of healthcare reform. In fact, as shown in New York and Maryland, they can be a powerful stimulator to execute other reforms improving the quality of care, such as reducing avoidable ER visits and readmissions. By pushing responsibility for the financial management of care to providers, external parties (government and private payers) can start to get out of the business of micro-managing the practice of medicine and its administrative hassles, like utilization management.

A global budget can be formulated at many levels. Politically it can exist at the national, state, and regional level, with further distributions to individual managed care companies and/or providers, such as hospitals. To provide stability, a budget program should operate by a formula that can be projected out multiple years. The funds can be distributed to payers who are tasked to work with providers to stay within the caps. Or, the funds can be allocated centrally to specific provider organizations that are responsible for the spending of an attributed population, with insurance playing more the role of a pass-through. There are benefits and drawbacks to each approach. New York uses a mixed model of payer and provider responsibility, while Maryland and the rural Pennsylvania project focus on setting budgets for hospitals directly, while leaving office-based physicians in more traditional relationships with payers. Whatever the starting point, hospitals and other providers will need to take on risk for the cost of care and align their incentives with the efficient delivery of appropriate care. The move to budgets continues the transition to “value” that has dominated health care policy for over a decade.

Despite the political inertia that resists any major reform, the move to global budgets seems highly likely, eventually. It need not be a triumph of the pocketbook over the heart. Affordability is not a dry goal for lifeless bean-counters. The high cost of healthcare brings bankruptcy, despair, suicide, and diverse dreams deferred or abandoned for the uninsured and poorly insured, and even for some who thought they were well-insured. A long term healthcare budget growth rate that is 0.4 percent less than the long term growth in GDP will mean that every year healthcare costs get a little easier to bear. After some years, the belt-tightening period would be over and growth would increase again to match the overall economy. Rather than one-time cuts that hurt those with few resources most, Republicans should focus on doing what they campaigned on: keeping everyone covered at a lower cost…modified with the boring but essential caveat that “lower cost” is relative to the growing economy, not a big one-time drop in nominal dollars. Democrats know that it is not in the national interest for healthcare to keep absorbing more and more of every dollar earned, and that it undermines Democratic objectives such as achieving universal healthcare. They should embrace the discipline of budgets to accomplish this. We don’t need to keep taking the path of maximal pain.

Jonathan Halvorson is a consultant on healthcare policy and strategy for Sachs Policy Group. He is formerly the Director of Operations and Systems for the New York State Office of Health Insurance Programs, which administers New York’s Medicaid program. The views expressed here are his own.


Only Trump Can Go to Single Payer

Only Trump Can Go to Single Payer

There is an old Vulcan proverb saying that only Nixon could go to China. Only a man who used to work for Joseph McCarthy could set America on a path to better relations with a virulently Communist country. A few years after Nixon went to China, Menachem Begin, the Israeli Prime Minister who represented people believing that the state of Israel should start at the Nile and end at the Euphrates, gave Egypt back all the lands conquered in a recent war and made a lasting peace with Israel’s largest enemy. They said back then that only Begin could make peace with the Arabs.

Today, I want to submit to you that only Trump can make single-payer health care happen in this country. Only a billionaire, surrounded by a cabinet of billionaires, representing a party partial to billionaires, can make that hazardous 180 degrees political turn and better the lives of the American people, and perhaps the entire world as a result. Oh, I know it’s too soon to make this observation, but note that both Mr. Nixon and Mr. Begin were deeply resented (to put it mildly) in their times, by the same type of people who find Mr. Trump distasteful today. The liberal intelligentsia back then did not have the bona fides required to cross the political chasm between one nation and its ideological enemies, or as real as death immediate foes. The liberal intelligentsia today lost all credibility in this country when it comes to providing a universal solution to our health care woes.

Free health care (and free college) are not solutions. These are rabble rousing slogans to gin up the vote, slogans that end up in overflowing trashcans left in ballrooms littered with red white and blue balloons after everybody goes home to get some sleep before the next round of calls to solicit funds from wealthy donors for the next campaign. Providing proper medical care to the American people is a monumental enterprise that engages tens of millions of workers from all walks of life, every second of every day, in every square mile of habitable land, littered with the hopes and fears of hundreds of millions of invisible men, women and children who call this great country their home. This is not something that can be made free. Nothing is free in our times, not even sunshine and fresh air.

For the jaded, the cynically inclined, and those who are simply too afraid to jump off this cliff, and therefore argue that single-payer is not politically feasible, I have a simple question. Did you all think a couple of years ago, that a President Trump is politically feasible? Okay then. Here is what I believe could be a relatively plausible scenario enabling this one-of-a-kind administration to use its unconventional political capital (if you can even call it that) to get us on the road to making health care great again, greater than ever before.

Step 1: Disaster

The current system, held together with string and duct tape must undergo a seismic shock, preferably a moderate shock and one that does not involve war and famine. The way things look now, the most likely implosion will be the Obamacare individual market. If the Trump administration holds back ransom money from insurance companies (a.k.a. CSRs), or engages in other mischievous behavior, and the individual mandate is not enforced, we may very well have a minor disaster on our hands. In addition, the President’s Commission on Combating Drug Addiction and the Opioid Crisis is requesting that the President declare the opioid epidemic a national public health emergency. Put these two together and you see how lots of people are, or will shortly be, in dire need of medical services not currently available to them via existing “insurance” channels.

Step 2: Relief

The opioid crisis will need much more than providing care for its current victims, but we will need a coordinated effort to provide all necessary medical services to people addicted to opioids who are uninsured, or whose insurer is refusing to pay for the extensive programs needed for recovery. People who were able to afford insurance under Obamacare without, or with minimal, subsidies and are now left hanging to dry will also need a solution, and if they are sick, they will need immediate relief. This would be the perfect time to cut through the red tape and institute the Disaster Relief and Emergency Access to Medicare (DREAM) program. The DREAM will open Medicare to the victims of Obamacare and the victims of the opioid epidemic. This will be put in place as a temporary disaster response program, subject to extension of course, until a more permanent solution can be found. I doubt too many people in Congress could vote against such measure.

Step 3: The DREAM

No matter how short lived, all government programs including temporary ones need rules and regulations to execute now, and to be replicated in future emergencies as needed. Besides, any respectable bill needs more than just a title. How do we define opioid addiction? How do we define Obamacare victim? How do they sign up? What do they get? How much will it cost?

Opioid Crisis

  • Congress will appropriate $45 billion for this program for a period of five years to cover administrative costs, medical costs and program analysis costs.
  • Emergency funding will be provided to Federally Qualified Community Centers (FQHCs) to set up a process for opioid addiction screening. FQHCs are non-profit clinics, funded by the Federal government to serve low income populations regardless of ability to pay. All physicians and staff are salaried. The funding will be administered by the Health Resources and Services Administration (HRSA) and defined by the Secretary of Health and Human Services (HHS).
  • Any American citizen or lawful permanent resident will be eligible to access any FQHC and undergo opioid screening as specified by the Secretary at no cost. Individuals eligible for relief, based solely on clinical criteria, will need to provide information about their insurance status. Upon receipt of consent from the individual or legal guardian if the screened individual is a minor, eligibility results and insurance information will be sent from the FQHC to CMS for enrollment in the DREAM program.
  • If the eligible person (EP) is currently covered by commercial insurance, CMS will contact the EP’s insurance plan and require that the plan contacts the EP or legal guardian and obtains proper consent to transfer the EP’s coverage to the DREAM program. Following EP consent, Medicare will become the primary payer for the EP. Medicare at its sole discretion may discontinue eligibility for the EP and the commercial plan must reinstate coverage for the EP at that time. All subsidies paid by the Federal government to the insurance plan, if any, will be paid into the Medicare trust fund for the duration of DREAM participation.
  • The EP will pay to Medicare premiums equal to the last monthly amount the EP paid to the commercial plan. Medicare will cover all opioid related services with zero deductible and zero copay. For other services the EP deductible and copays will be equal to those of traditional Medicare beneficiaries (parts A, B and D). Medicare will end DREAM eligibility for an EP who missed 3 consecutive monthly payments.
  • If the EP is insured, or eligible to be insured, through Medicaid or any other public program, Medicaid or any other public program, will transfer into the Medicare trust fund estimated monthly premiums as calculated by the Secretary for the duration of DREAM participation. Medicaid will become the secondary payer for EPs previously enrolled, or eligible to be enrolled, in Medicaid.
  • If the EP is uninsured and not eligible for public insurance, the EP will be enrolled in Medicare (parts A, B and D), under the same terms as beneficiaries 65 years or older for the duration of DREAM eligibility, except that all opioid related services will be covered with zero deductible and zero copay.

Obamacare Crisis

  • Congress will appropriate $45 million for this program for a period of five years to cover program administration, evaluation and analysis. All other program costs, if any, will be absorbed by CMS budgets.
  • Any American citizen or lawful permanent resident who is not offered employer sponsored insurance, and is not eligible for Medicaid or another public insurance plan, and is not eligible for Federal subsidies on the Obamacare exchanges equal to at least 50% of total costs of the current benchmark plan, or resides in a county where no Obamacare plans are available on the exchange on the first day of the open enrollment period, will be eligible to enroll in Medicare parts A, B and D, at an annual rate of average Medicare spending per beneficiary (MSPB), adjusted for EP age.
  • The Secretary shall publish a list of DREAM premiums for three age bands, 0-21, 22-45, 46-64, no later than one month before the first day of open enrollment for the Obamacare exchanges. All DREAM rates will be assessed and billed for each individual EP. No family rates will be available and no Federal subsidies will be given to DREAM enrollees.
  • The EP, or a legal guardian if the EP is a minor, is responsible for premium payments to Medicare. EP deductible and copays will be equal to those of traditional Medicare beneficiaries (parts A, B and D). Medicare will end DREAM eligibility for an EP who missed 3 consecutive monthly payments.
  • For each program year the Secretary shall conduct and publish comparative analyses of Federal spending on Obamacare exchange enrollees and DREAM program enrollees to inform Congress and the public on the merits of each program.

Step 4: Consequences

See? Wasn’t that bad now, was it? Defining the program is relatively easy and the above is just an abbreviated example. Other details will need to be added, removed or changed, but the main idea here is to open Medicare in the short term to people who are hurting and are underserved by the commercial health insurance markets. There will of course be consequences. First, the Obamacare exchanges will most likely go bust, and we will have to expand the DREAM to allow enrollment of people who will bring their subsidies with them. Second, employers may decide to fund Medicare premiums instead of dealing with health insurance in house. Third, the folks who don’t qualify for the DREAM program may start chomping at the bit, seeing how DREAMers get to choose pretty much everything without breaking the bank.

Yes, yes, I know. I’m being too clever by half, but surely someone who professes to be the voice of the forgotten men and women, could see his way clear to make this happen. It will, after all, lead to a complete repeal and replace of Obamacare. And for all timid liberals enamored with the poetry inscribed at the feet of Lady Liberty, let’s help the President erect a statue of liberty at the gates to Medicare.




The Trump Health Policy Train Wreck

The Trump Health Policy Train Wreck

For the second time in just four months, President Trump finds himself standing on the sidewalk reeling and looking for the license number of the health policy truck that hit him.

In the wake of Senator John McCain’s unexpected vote last week killing the “skinny” version of ACA repeal, Republicans abandoned their efforts to “repeal and replace” ObamaCare.

Though the process may not be “over” as of this writing, this has been the most catastrophically mismanaged federal health policy cycle we’ve seen in our lifetimes. In this post, I turn to Blumenthal and Morone’s 2009 analysis, The Heart of Power: Health and Politics in the Oval Office” for help in deconstructing the Trump Presidency’s politically costly health policy adventure.

Blumenthal and Morone distilled eight key lessons about how to manage the health care issue from the records of the post-Roosevelt Presidents’ health policy efforts. Attached to each lesson is a letter grade for Trump’s performance.

To succeed in health reform, President must “care deeply” about the issue.

Candidate Trump did not pretend to be a health policy expert, but the most potent applause line in his campaign speeches was his promise to the Republican base to “repeal and replace” ObamaCare. Trump complicated his task, perhaps without fully realizing it, by running way to the left of his base in promising not to cut Medicare and Medicaid and to give people better coverage for less money.

The challenge of rearranging federal involvement in healthcare financing within the “repeal and replace” promise was clearly a good deal more complex than candidate Trump expected, and he candidly admitted as much. One can criticize the Clintons for many aspects of their 1993-94 failed health reform effort, but their substantive grasp of the policy choices involved was truly impressive. Either Clinton could have commanded the stage in a graduate seminar on health policy at Harvard or Hopkins.

Trump, not so much. His repeated references to “the healthcare” as his shorthand on the issue were not an encouraging sign of his immersion in the issue, but the following verbatim excerpt from his July 19, 2017 interview with the New York Times was a masterpiece:

“So pre-existing conditions are a tough deal. Because you are basically saying from the moment the insurance, you’re 21 years old, you start working and you’re paying $12 a year for insurance, and by the time you’re 70, you get a nice plan. Here’s something where you walk up and say, ‘I want my insurance.’ It’s a very tough deal, but it is something that we’re doing a good job of.”

This was despite multiple earnest efforts by numerous outside parties -Zeke Emanuel (in person) and Avik Roy, James Capretta, Joe Antos and Gail Wilensky (in editorial venues ) to educate him on the knotty substantive problem with repealing ObamaCare’s coverage guarantees, and a host of other issues. At its root, the TrumpCare debacle can be laid at the feet of Presidential disengagement. Trump’s grade: F.

The need for speed. Blumenthal and Morone wrote; “The day after the presidential election, the savvy health policy analyst will slip his or her president-elect a message: ‘Hurry up- you’re running out of time.’ The window of opportunity always slams shut quickly.” In former Senator Alan Simpson’s immortal words: “Healthcare is like bear meat. The longer you chew it, the bigger it gets.” Presidents do not always control their agendas (see Obama/World Financial Crisis), but early is good., as public passion for the issue cools with each passing month as complexities and industry reaction grow.

The practical reality: the closer one gets to mid-term elections, the less willing vulnerable Congress people are to risk political capital on healthcare legislation that may not help them. Despite the commitment to “repeal and replace” on Day 1, the lengthening delay in dealing with the rest of the Trump agenda (tax reform, infrastructure) plus budget and debt ceiling weighs heavily. Trump’s Grade on Speed: D, so far.

Bring a Plan with You. Blumenthal and Morone stressed the importance of “coming into office with a legislative proposal in hand”. In Trump’s case, this was deceptive, because actual legislation was passed by previous Republican Congresses to “repeal and replace” ObamaCare, albeit with full confidence of a Presidential veto. But in the real world of 2017, the political and health system consequences of repeal were untested. The prior legislation was, in other words, completely and blissfully reactionary: symbolically repealing the “Obama” part of ObamaCare, without contending with the messy realities of 20 + million dispossessed individuals, or the stability of the partially federalized individual insurance market. The bill the House passed in May could easily have been titled The Political Revenge and Upward Redistribution Act of 2017, mainly a huge tax cut for corporations and high income individuals, which bore no relation whatsoever to Trump’s campaign promises. Thus, Trump rates an exculpatory C on Bring a Plan, but an F for situational awareness and an F- for fidelity to his campaign platform.

Hush the Economists. Blumenthal and Morone believed that “expanding health coverage requires presidents who are able and willing to overrule their economic advisors”. This is presumably because at any given moment in any health reform debate, someone in the administration will ask “can we afford to expand coverage?”, and deficit hawk economists will answer “not now.”

Here, I disagree with the substance of Blumenthal and Morone’s analysis: health policy cannot exist in a fiscal vacuum; financing must be sustainable for the coverage expansion to last. Part of ObamaCare’s problem was that the unrealistic White House policy requirements that ObamaCare reduce the deficit and that capped the cost at under $1 trillion-both imposed by the President’s political advisors. These economic constraints resulted in inadequate subsidies, mediocre actual dollar coverage and tepid public reaction to the reforms.

However, the Trump process was not driven by policy, economic or otherwise. It was completely political. Since economists played zero role in the TrumpCare debacle, Trump gets an A for ignoring their input.

Go Public. “There is only one job the president can do: create popular momentum for reform”. Here, Trump’s disengagement played a crucial role. Public support for ObamaCare was always lukewarm, rising above 50% exactly one month and languishing in the 40’s in the Kaiser tracking polls for most of the ensuing seven years. Yet, with a vulnerable target, , Trump continuing to pound on the one note “ObamaCare is a disaster” as evidence mounted of the potential harm done to specific individuals, including Trump’s own electoral base from repealing it. His surrogates didn’t help much, either. Sec. Tom Price was caught claiming that the House bill would not result in Medicaid patients losing coverage, despite multiple Congressional Budget Office findings of eight-figure enrollment declines. The result was a steady increase in the popularity of the law. Trump gets a D- on Going Public.

Manage Congress. “The successful president must be nimble at making our convoluted legislative machinery work.” Trump’s job here was made difficult not only by his campaign promises discussed above, but also by profound divisions in his own party. There were at least three distinct Congressional factions (and therefore agendas): the hardcore Freedom Caucus folks (“Repeal” is fine. Screw “Replace”), the Deficit Hawks (Must Shrink Federal Fiscal commitment to Medicaid AND Medicare, not just roll back the coverage expansion) and the Repeal and Replace (but Leave Medicaid Expansion alone)- the twenty Republican Senators whose states expanded coverage. Similar intraparty divisions cratered the Clinton reforms and nearly killed ObamaCare.

Even a skilled legislative tactician would have struggled to craft a working Senate majority from this divided Republican troop configuration, with only two votes to lose. In retrospect, McConnell came remarkably close, but Trump made his job much harder with huge relationship damage from gratuitous public bullying of Mark Meadows, Lisa Murkowski, Dean Heller, and others. Trump oscillated between complete disengagement and unhelpful and ill-timed interventions. Between clumsy public cajoling, private threats, and constant Twitter driven tactical second guessing, Trump earns an F for capricious and inconstant management of Congress.

Forget the PSROs. This was Blumenthal and Morone’s injunction to Presidents not toget caught up in health policy minutiae. Per #1 above, not a problem for Trump. Grade: A.

Learn How to Lose. Blumenthal and Morone’s message: Given the historical record of the past eighty plus years, the odds are that a given President will be unsuccessful in accomplishing major health reforms. By “learning how to lose”, they meant disengaging gracefully, leaving the door open not only to dissident members of his own party, but collaboration with the other political party to enable incremental progress in the rest of the Presidential term. The Clintons did this, and achieved significant administrative progress with HIPAA in 1996, and a significant coverage expansion with S-CHIP in 1998, both bipartisan bills.

So far, Trump seems not to grasp the “disengage with grace” logic. His recent tweets on the subject show a pronounced disinclination to move on. They have been angry, petulant and insulting (“fools”, “total quitters”, threatening their health coverage) not only to his shaken majorities but to the Democrats who might be future partners in insurance market reforms. 
Jimmy Carter once said, “Show me a good loser and I’ll show you a loser”, but this is a pretty impressive case of sore loser-ism. Grade so far, F.

As Blumenthal and Morone made abundantly clear in their book, health reform is a devilishly difficult policy and political challenge for any President, even for those who prepared for it years in advance. Lacking a White House health policy presence, and strong White House issue and legislative management, Trump managed to squander a boatload of political capital on his thusfar unsuccessful ObamaCare initiative. Perhaps with a new White House chief of staff, and candid conversation with his Congressional Republican leadership, the President can minimize the negative impact of the TrumpCare debacle on the rest of his domestic policy agenda.


Specialty and Chronic Care: Re-Imagined

Specialty and Chronic Care: Re-Imagined

It’s not news that technology-enabled innovations are major drivers in the transformation of care delivery. Cutting-edge solutions are re-organizing provider workflows and delivering real-time data analytics to improve outcomes, lower costs and empower both acute and chronic care patients to be their own best advocates. What’s new is the emergence of tech-enabled services that are taking aim at specific parts of chronic disease and specialty care.

At this year’s Health 2.0 11th Annual Fall Conference, we will provide a lively and in-depth exploration of these new market entrants in the realms of diabetes and oncology. The Evolution of Care Delivery Panel will include Livongo, Canary Health, Omada Health, Virta Health, MySugr, Integra Connect and Flatiron Health, all very well funded and all doing things very differently than the status quo.
How far will these new technologies change the organization of care delivery, and what are the impacts for patients, clinicians, providers, payers, pharma and vendors? Register here for the Annual Fall Conference  to find out!
P.S. Get a sneak peek of the key topics and discussion points of the panel session during the upcoming The New World of Specialty Care Webinar on Wednesday, August 15. Register here for the free webinar.

Single-Payer is the American Way

Single-Payer is the American Way

As is customary for every administration in recent history, the Trump administration chose to impale itself on the national spear known as health care in America. The consequences so far are precisely as I expected, but one intriguing phenomenon is surprisingly beginning to emerge. People are starting to talk about single-payer. People who are not avowed socialists, people who benefit handsomely from the health care status quo seem to feel a need to address this four hundred pound gorilla, sitting patiently in a corner of our health care situation room. Why?

The all too public spectacle of a Republican party at war with itself over repealing and replacing Obamacare is teaching us one certain thing. There are no good solutions to health care within the acceptable realm of incremental, compromise driven, modern American solutions to everything, solutions that have been crippling the country and its people since the mid-seventies, which is when America lost its mojo. To fix health care, we have to go back to times when America was truly great, times when the wealthy Roosevelts of New York lived in the White House, times when graduating from Harvard or Yale were not cookie cutter prerequisites to becoming President, times when the President of the United States conducted meetings while sitting on the toilet with the door open and nobody cared. Rings a bell?

Single-payer health care is one such bold solution. Listening to the back and forth banter on social media, one may be tempted to disagree. We don’t have enough money for single-payer. Both Vermont and California tried and quit because of astronomic costs. Hundreds of thousands of people working for insurance companies will become unemployed. Hospitals will close. Entire towns will be wiped out. Doctors will become lazy inefficient government employees and you’ll have to wait months before seeing a doctor. And of course, there will be formal and informal death panels. Did I miss anything? I’m pretty sure I did, so let’s enumerate.

Single-payer is going to bankrupt the nation

We have $3 Trillion in our health care pot right now. We have 325 million Americans, men women and children of all ages. First grade arithmetic says we have almost $10,000 per year to spend on each American, the vast majority of whom is either young or healthy or both. For comparison, Medicare spends on average around $12,000 per year for the oldest and sickest population. Last year a platinum plan for a 21 year old cost less than $5,000 per year and this includes the built in waste of private health insurance. So please, tell me again how we can’t afford to pay for everybody’s health care needs at a Medicare actuarial level, which is slightly less than commercial platinum.

And no, we need not increase taxes either. You keep paying what you’re paying. Your employer keeps paying what it is paying. The government keeps paying what it’s paying. But instead of dispersing all that cash to all sorts of corporate entities standing in line with their golden little soup bowls ready to catch the last drop, we put it all together in one big beautiful barrel, and pay for care directly to those who provide care – one pool, one budget, and one accounting system for all. This is a national endeavor. It is irrelevant that Vermont failed and California bungled the whole thing. Do you think California and Vermont could afford to provide for their own armies, air force and navies? I didn’t think so.

Single-payer will cause millions to lose their jobs

Hundreds of thousands of people work for commercial insurers. Claims need to be processed, money needs to be collected and paid out, books need to be kept, customers and service providers need to be supported, computers have to be maintained, audits need to be performed, contracts need t be managed, lots and lots of labor and lots and lots of decently paying jobs. Do you have any idea how Medicare administration works? Or are you under the impression that Medicare runs itself with no human labor? Have you ever heard of Noridian or Cahaba? No? Then I respectfully suggest that you should refrain from opining about the horrors of single-payer.

Medicare is run by private administrative contractors called MACs, each assigned to specific geographical regions and specific portions of Medicare services. In addition to the MACs there are slews of functional contractors that specialize in one or more types of supporting services to the MACs. These are private entities no different from Boeing, Lockheed Martin, Hewlett-Packard, Booz Allen Hamilton, GE and many more. They employ thousands of people and if Medicare becomes our single-payer, there will be more MACs, more functional contractors, and hundreds of thousands more private employees.

That said, it stands to reason that consolidation from many payers to one, will introduce some efficiencies and the total number of available jobs will be reduced, so here is a solution to this potential problem. Currently all insurers including Medicare and Medicaid are offshoring claim processing and in the case of private insurers other functions, including clinical, as well. Change the regulations and bring those jobs back home where they belong in the first place, and offer them to those who will lose their commercial insurance jobs. This administration is especially well positioned to effect such changes to CMS regulations.

Single-payer will take away our freedom

What if Sam’s Club only carried General Mills cereal and Costco only carried Kellogg’s?  What if you had a Costco membership but stopped by another store to pick up some Cheerios and were charged ten times as much as Sam’s Cub sells it for? No it’s not exactly the same, but you get the idea. Would you consider this to be freedom of choice? Or would you rather have one big huge market where all brands sell their products directly to you competing against each other? The latter is how single-payer could work. Freedom to shop for an insurance plan is freedom to shop for your preferred rationing scheme and ultimately your own flavor of death panel.

Traditional Medicare allows you to choose your doctor and your hospital and it pays for all medically necessary services. No commercial plan can say the same unless it’s one of those platinum things nobody can afford. Traditional Medicare can do that because it sets the prices for all health care providers, instead of negotiating with a few preferred vendors. Medicare can take these liberties because it’s big enough and because it’s a Federal program. But Medicare doesn’t pay for everything. That’s why most seniors purchase supplemental plans if they can afford them, and if they are poor enough, Medicaid kicks in as the secondary payer. Being the safety net for the fixed price single-payer should be the sole function of a new and federally administered Medicaid.

Single-payer will destroy our health care

I think American medicine is the best in the whole world. Not because it’s expensive and not due to the corrupt ways in which it’s being financed, but in spite of these things. Finding a better way to pay our medical bills has nothing to do with the quality of American medicine. The concern here is that once Medicare becomes the only game in town, it will unilaterally cut its fee schedules and all hospitals will go bankrupt, all doctors will be driven into homelessness, no new drugs will be developed and we’re all going to die. On the other hand, the Federal government is the sole purchaser of aircraft carriers, stealth bombers, and weaponry of all types. How cheap are those items?  How powerless and decrepit is that industry?

Precisely because of the lessons learned from the mighty military industrial complex, single-payer reform will have to change three things in the structure of our current so-called health care system. First, all hospital consolidation and acquisition of physician practices will need to be rolled back. Second, petty regulations, vindictive carrots and sticks strategies and crude attempts at social engineering by clueless bureaucrats, will have to be dismantled brick by brick. Third, physicians will need to form a union of independent small contractors to negotiate fees and terms alongside the already powerful hospital associations. I have been a longtime proponent of a physicians’ union, even in our current system, to serve as check and balance to corporate greed and government arrogance. A single-payer system cannot and will not succeed without unionized independent physicians.

Single-payer is not the American way

We have been conditioned by large corporations to think that what they do to us is the nature of free-markets, and thus the only way to achieve prosperity for all. I would submit (for the millionth time) that what Apple is doing to the world has nothing to do with Adam Smith’s free markets. The actors in classic free markets must be approximately equal. When sellers are so big that they need artificially intelligent tools to even notice the existence of buyers, there is no free market. When the price of products sold exceeds the lifetime incomes of most buyers, there is no free market. When no one can muster enough moral turpitude to publicly say that if you’re poor, your babies should die, there is no free market. There is no free market and there can be no free market in health care.

There can however be competition. Perhaps not in sparsely populated areas, and perhaps not for highly complex procedures, but there can be competition for most health care services in most places. The uniform single-payer price should be set so that innovative hospitals and entrepreneurial physicians can thrive by charging less and those holding themselves in higher than usual esteem, or those who choose to provide luxury, are free to charge more. If all sellers are small enough, and if the standard single-payer price is fairly negotiated, we will have a real market, because people will shop to save money (in a rewards system like credit cards have) and some will shop for status and vanity.

Will there be a role for private insurance?  There could be, but private insurance should not be allowed to cover any services covered by the single-payer because that would take us back to where we are today. Let private insurance cover stuff nobody needs, but wealthy people like to flaunt, like fresh baked brioche for breakfast after having a baby, or executive physicals in palatial settings, and let those things become frightfully expensive, as these types of things usually are in a free market.

Single-payer will create a new set of losers. Health care executives making tens of millions of dollars every year for no particular reason will be losers. Perhaps they can find new careers at Boeing or Lockheed Martin seeing how their expertise is easily transferable. Health insurance stocks will tank and improperly managed pension funds will also lose bigly. People running for elections will see a major cash cow go dry after the initial struggle is over and done with. There will be powerful losers and it won’t be easy.

But Obamacare has its losers too. Hard working, taxpaying middle class citizens were the designated losers of Obamacare. Some by commission and most by omission, because Obamacare made no attempt to solve the health care problems facing the vast majority of workers with employer sponsored health insurance. That bomb keeps ticking away at a steady pace. The newly empowered Republican Party has nothing to offer either, and I can’t blame them. There is nothing more we can do here. We tried everything else, and now it’s time to do the right thing. It’s the American way.

Doctors Do Know Best. Exhibit A: The Charlie Gard Case.

Doctors Do Know Best. Exhibit A: The Charlie Gard Case.


For American conservatives, Britain’s NHS is an antiquated Orwellian dystopia. For Brits, even those who don’t love the NHS, American conservatives are better suited to spaghetti westerns, such as Fistful of Dollars, than reality.

The twain is unlikely to meet after the recent press surrounding Charlie Gard the infant, now deceased, with a rare, fatal mitochondrial disorder in which mitochondrial DNA is depleted – mitochondrial depletion disorder (MDD). In this condition, the cells lose their power supply and tissues, notably in the brain, die progressively and rapidly.

The courts forbade Charlie’s parents from taking him for a last dash of hope to the United States. This confirmed for many conservatives the perils of a government-run healthcare system, where the state decides who lives and who dies through Death Panels.

Ted and Mike, whose healthcare reform might affect many curable little Charlies, were moved by the plight of an incurable Charlie. No European will understand the science behind their sentiment – if you care so much about a sick incurable baby, why don’t you care about sick, cure.

Brits will never get the importance conservatives place on individual choice, even if that choice is forlorn, and of the lure of medical heroism. Conservatives seldom acknowledge that modern medicine reaches its limitations too quickly for Death Panels to be effective. Charlie was given a grim prognosis by doctors at the Great Ormond Street Hospital (GOSH), arguably the finest hospital for sick children in the babies, they’d ask.

GOSH might not have the endowments of its American counterparts. It is an orthodox British hospital with creaking staircases, the sort where I trained, where doctors have incredible clinical acumen, paranormal common sense, and dabble freely in paternalism. Doctors know best and are not ashamed to say so. When doctors at GOSH say death is imminent, Death Panelists are rendered unemployed, unless there’s a miracle to slay. For Charlie, that miracle was a New York neurologist offering an untested therapy.

The reaction to Charlie’s plight is as instructive as the reaction to the reaction to his plight. It’s as if everyone took the Rorschach test simultaneously.

Charlie’s plight was felt by the Pope. The Pontiff is a busy chap and can’t possibly Tweet in support of every dying child in GOSH. But once the media portrayed his suffering, everyone jumped on the bandwagon. The Pope was joined by Ted Cruz, Donald Trump, Theresa May, Nigel Farage and even the notoriously unsentimental Jeremy Corbyn. This is the power of the identifiable victim.

Some have wondered whether our preoccupation with stories such as Charlie’s diverts our moral and financial resources from tackling deaths from malaria in Africa – i.e. we don’t care about deaths from malaria because we care too much about one dying infant. In this classic utilitarian fallacy, the utilitarian treats moral sentiments as a zero-sum game with opportunity costs. The truth, as Adam Smith pointed out in Theory of Moral Sentiments, is that we’ll always be more perturbed by events proximate to us, the identifiable victim, than random people who don’t appear on our Twitter timeline. If Charlie hadn’t surfaced in our news channels, we still wouldn’t be fretting about deaths from malaria in far off countries we’ve never heard about.

Charlie’s case showed the limitations of not just modern medicine but modern medical ethics.

When all hopes seemed lost, Charlie’s parents did what many do today – they consulted Dr. Google, who didn’t disappoint. Their search revealed a New York neurologist – Dr. Michio Hirano, a researcher and an expert in mitochondrial disorders.

When hope resurfaced so did the controversy. The first point of controversy was that the nucleoside therapy Dr. Hirano was offering was not scientific – i.e. there was no proven benefit of the nucleoside in the specific variant (RRM2B) of Charlie’s MDD – it hadn’t even been tested on animals with that variant. GOSH, the High Court and the terribly unoriginal European Court, used the absence of proven efficacy in their justification for stopping the parents from taking the child to the US.

“Not scientific”, a compelling statement as no one can argue with science, needs parsing. It is possible for a treatment for a rare disease to have promising results in a small trial in the US, but still not be available in the NHS either because the National Institute of Clinical Excellence (NICE) hasn’t gotten around to approving it or is waiting for more evidence. This wasn’t the case with Charlie’s disorder, but my point is what may be unscientific today may truly be unscientific or may simply be waiting for NICE to schedule a conference call.

Charlie would have been the first patient with the RRM2B variant to have received the nucleoside therapy. Though we don’t know for certain, it is highly unlikely Charlie would have responded favorably. Had he responded favorably, the treatment’s efficacy would be certain. This is because Charlie’s condition had a 100 % fatality and anything that’d have saved him, gotten him off the ventilator and breathing spontaneously, and restored his motor function, would either be a parachute or a prophet – you don’t need a double blind, placebo-controlled, randomized controlled trial to test the efficacy of a drug for a condition which is imminently and uniformly fatal.

The neurologist was accused of having financially conflict of interest in nucleoside therapy, which he has strongly denied.

This familiar moral dilemma, which brings science closer to morality than necessary, begs legitimate questions. Was the doctor genuinely motivated by a desire to help or by making more money? Was there truly therapeutic equipoise or was he selling snake oil?

Science being morally neutral means that the neurologist’s motivation for helping was moot. The therapy either worked or didn’t. And if it worked no one would care if the doctor is Satan. If it didn’t work it scant mattered if he were the Pontiff. His financial conflict of interest is relevant only because it indicates whether equipoise – i.e. that the therapy may work –  is justified.

To emphasize, we must believe that science, i.e. proven treatment benefits, is morally neutral –  because it would be silly not to – I mean it’d be like saying a treatment would work better if the prescribing doctor were more pious.

But, seemingly, equipoise is not morally neutral. What we’re saying is that the uncertainty, and I repeat the uncertainty, that a treatment may work depends, to some extent, on the motivations of who is calling the experiment. This is understandable because medicine is replete with stories of sellers of snake oil. But there’s a large coastline of plausibility far removed from snake oil.

Dr. Hirano wasn’t selling snake oil. He was selling a plausible but untested treatment to desperate parents. The nucleoside therapy had modest efficacy in a variant of Charlie’s disorder (TK 2). But had never been tested in the RR2MB mutation, which Charlie had. It was unscientific because it was unproven – it wasn’t implausible – it certainly wasn’t snake oil.

Ironically, precision medicine exposed the unscientific nature of the nucleoside therapy. Imagine if you couldn’t sequence. You wouldn’t know that MDD had variants – that is you wouldn’t know whether Charlie’s MDD was the TK2 or the RR2MB variant, it’d all be the same. Would the nucleoside therapy, which had worked in a handful of patients with the TK2 variant, still have been unscientific? This is not a dig against precision medicine. I’m merely asking for less dogmatism in what we call unscientific, given that the line is so thin between groups in which therapies work and don’t work.

This takes me to the desperation of Charlie’s parents. I can’t even begin to imagine what they were going through. I recall how I reacted at the very slight possibility that my older son, when he was three weeks old, had pyloric stenosis. My frontal lobe stopped working. Were I Charlie’s parents, I’d have fought tooth and nail and eked every possibility. I’d have done exactly what they did.

Parents of children who have terminal illnesses have nothing to lose, so they pursue any hope, no matter how hopeless the hope is. Some ethicists find this sentiment repugnant. You can see why the ethicist’s ire is drawn. Picture this – desperate parents willing to do anything, offered false hope by a doctor who knows that their condition is hopeless, who knows the treatment is unproven, and who is merely taking advantage of their predicament, like a parasite. Won’t you be disgusted by that doctor?

Let’s reframe this. A doctor offers hope to desperate parents who have nothing to lose except hope itself. The doctor believes that denying hope, no matter how hopeless, will be crueler than giving hope. Incidentally, Lord Krishna, one of the many Gods of Hindus, said that a lie which makes someone feel better is better than a thousand truths which make a person feel worse.

Are you still disgusted with the doctor prescribing hope? I’d say “repugnance” is a rather strong sentiment in this ethical gray zone, where the answer depends on how the situation is framed. To believe medical ethics is as absolute as Newton’s Third Law of Motion betrays an alarming level of judgment.

Charlie would have been the first to receive the nucleoside therapy for his condition. In any trial of medical treatment, there is always an index patient – the first to receive the unproven therapy. This is an inviolable fact, whether the unproven therapy later proves itself or not.

Would we be offended if Charlie was the first to receive the unproven treatment as part of a research trial with a hypothesis where the researcher purposefully set out to collect data and specified the outcomes in advance?

It was unethical to experiment unproven therapy with Charlie. Paradoxically, it was also unethical to give Charlie unproven treatment because it wasn’t an experiment.

What then in modern era is the difference between a neurologist responding to desperate parents by giving unproven therapy and a neurologist responding to desperate parents by giving unproven therapy as part of a trial? It’s easy seeing that both scenarios are experimental. But there is a difference. The latter comes with regulatory oversight, the former doesn’t. So, a major gripe here is the absence of regulatory oversight.

This wouldn’t have been the first-time unproven therapy has been offered to sick children with fatal conditions short circuiting a trial. Take the case of surgery for complex congenital heart diseases such as Hypoplastic Left Heart Syndrome. The first time a surgeon operated on a neonate with this condition, the treatment was unproven and, therefore, unscientific. The treatment was offered to desperate parents who believed they had nothing to lose. Indeed, the operative morbidity and mortality for early cardiac surgery for congenital heart disease was so high that whatever short life span these babies had was curtailed by the surgery – i.e. surgery made matters worse. Then the heart surgeons learnt from their errors, improved their technique and patients lived longer. Today, patients with complex congenital heart disease are old enough to worry about cancer and dementia.

Again, the ethics of offering an unproven treatment to a sick child of desperate parents is trickier than first appears. While it may make us balk, the first few recipients of unproven therapy can be made worse, even if the therapy later does net good. I’m not terribly fond of utilitarian reasoning – greatest good to the greatest number – but utilitarianism makes its way through multiple avenues. One argument, which I’m partial to, is that if you relax the access to therapies which haven’t been adequately scientifically vetted for rare diseases with no cures, drug developers will have little incentive to produce genuine cures. This is a compelling and highly plausible conjecture, but it is utilitarian at its core – i.e. we believe that easy access for a few could lead to net harms for many.

Some have defended the action of GOSH by saying it is not about costs, only effectiveness. This is understandable – no one wants to muddy the issue by talking about costs – but disingenuous. Of course, costs are important when the taxpayer is footing the bill. Charlie was ventilated. He’d have to be shifted by air ambulance and accompanied by trained personnel. Medical resources aren’t free even in the NHS. And given that the effectiveness of the nucleoside therapy is nearly zero, the cost-effectiveness would be nearly infinite.

Charlie’s parents had raised funds to help with the costs. This evokes a familiar sentiment in the NHS – should they be allowed to pursue treatment simply because they can afford it? The NHS prides itself, rightly so, on equity – no one is denied proven treatment because of inability to pay. But it’s hard seeing how equity is disrupted if someone decides to pay for futile treatment. Furthermore, Britain has a parallel private system in which proven treatment is accelerated for those who can pay. The Brits, when they want, seem perfectly capable of tolerating inequity.

The crux of the matter was the tension between the welfare of the child and the wishes of the parents. When I was a junior doctor working in an emergency department in London, we were counselled not to bow to the demands of parents and prescribe antibiotics for febrile children. Doctors, even junior doctors, knew best.

The trickier situation is when parents refuse treatment for their sick child. Doctors have the law on their side here and you can understand why. If parents of a child with meningococcal septicemia are conscientious objectors of synthetic therapy and decide that antibiotics for meningitis aren’t indicated, their wishes can’t supersede medical necessity. That is if parents clash with doctors, the doctors will prevail, and the child will receive life-saving antibiotics against the wishes of the parents, and rightly so. Let me state this in no uncertain terms – the courts agree that doctors know best.

Neither medical paternalism, nor the fight against it, is absolute. Doctors do know best, but “best” is a spectrum. For example, the courts can’t force a child to be vaccinated against the wishes of the parents. Few would dispute that vaccinations are beneficial to both the individual and society. But the courts distinguish between a proximate harm and a probabilistic harm to the child.

Would subjecting Charlie to unproven therapy worsen his welfare? Arguably, yes – there’s a fate worse than death, and being on a ventilator prolonging death senselessly is a form of suffering, no less because it can’t be articulated. Does this come under the antibiotics – meningitis domain (proximate harm) or the vaccination domain (probabilistic harm)? I’d be inclined to put it towards the former, unless I was Charlie’s parents. But you can see that this, too, is in the ethical gray zone.

There’s no doubt that the doctors in GOSH made a good clinical call. But every now and then the medical profession encounters an outlier and responding to an outlier needs more than clinical acumen.

The matter reached the European Court – an institution which excels itself at irrelevance by saying nothing new. It’s hard not concluding that a drama was made of a crisis in a tricky realm where each actor wanted to stamp their absolutism. Would it really have been the world’s greatest travesty if Charlie had been taken to the US to receive an unproven therapy? Could GOSH have handled the matter more prudently? Was a legal injunction really necessary? Could the NHS have avoided been morally scolded by Ted Cruz?

Of note, when Dr. Hirano examined Charlie at GOSH he concluded that the brain damage could not be reversed. Perhaps if the doctors at GOSH had incorporated Dr. Hirano as part of their multidisciplinary team at the outset, thus respecting the parent’s preferences, the legal drama could have been avoided. NHS hospitals have something to learn from their American counterparts.

For conservatives, the Charlie Gard story affirms that the NHS is a tyrannical apparatus which conspires to rob people of their fundamental human rights and that Brits submit meekly to medical paternalism. In this tragic story, no one has been more naively absolutist than the conservatives. Calling the NHS “tyrannical” when it saves many poor kids without bankrupting their parents is absurd. This noble institution could, however, do with better PR, because it has come across as inflexible and dogmatic instead of compassionate and scientific. For both the National Health Service and the Great Ormond Street Hospital, this is a huge travesty.

Saurabh Jha is a contributing editor to THCB.













The Pri(n)ce of Healthcare

The Pri(n)ce of Healthcare

Tom Price, President Trump’s new Secretary of Health and Human Services (HHS) strode to the podium to the sound of applause.  The two thousand medical administrators and physicians at the annual meeting of CAPG, a trade organization representing physician groups, heard him described as the most influential person affecting the 300+ participating groups that provide care for millions.   Only the third physician to lead HHS, many hoped that the orthopedist and six term GOP congressman would bring new sophistication to the federal government’s healthcare programs.   

The perfectly coiffed Secretary looked every bit the new man in charge of healthcare.  Sadly, his resonant voice soon dashed any hope for substance.  He might have commented on the essential U.S. healthcare quandary:  A country with average household income of $56,000 can’t afford the $15,000 annual cost of health insurance for a family of four.   Neither Republicans nor Democrats can conjure up inexpensive insurance that covers unaffordable healthcare services.   What does the Secretary think?  He sidestepped the issue, twice patting his audience on the back by touting the American health system as “the finest in the world.”  Seriously?  If Price had attended the morning session he would have heard that the U.S. spends about 6% more of its GDP on healthcare than average developed country.  That extra $1.2 trillion amounts to more than twice the defense budget.  Yet U.S. health outcomes for crucial measures like infant mortality and lifespan rank average or even worse.  Yes, U.S. medical technology leads the world and foreign dignitaries still travel here for world class, high tech care.  But shouldn’t the secretary of HHS understand that the measure of a healthcare system is the quality and accessibility of care provided to average citizens?  

Perhaps more surprisingly, Price failed even to comment on the GOP-sized elephant in the room: The proposed House and Senate healthcare measures, supported by the administration, then awaiting action.  The non-partisan Congressional Budget Office estimated that the measures would cause millions to lose coverage.  Price’s Hippocratic Oath had no sunset provision.  If allowing millions to face loss of their coverage under the Affordable Care Act (ACA) would somehow “do no harm” why not explain the thinking to those on the front line?

Despite Price’s silence, the now fading proposals reveal a strategy of shifting national healthcare priorities toward an individualist rather than a collective approach.  This shift can be seen most readily in the GOP opposition to the standard benefit package, an ACA provision that requires insurance to cover  specific services.   Advocates for repeal note that eliminating standard benefit would reduce the cost of plans.  Although true, the savings occur only because enrollees play “benefit roulette,” hoping that that the omitted services don’t turn out to be needed in the future.  And if they do?  Dr. Price and the GOP would just leave that problem to the individual selecting the plan. 

Similarly, the proposed rollback of the mandate to purchase insurance allows individuals to opt out of the system entirely.  GOP proponents promote the change as enhancing individual liberty.  They ignore the fact that when uninsured individuals get sick and arrive at emergency rooms, they no longer opt out.  The costs of their care get covered by those paying into the system.   Those opting out become “free riders,” enjoying catastrophic coverage paid for by others.  Price and other advocates of repeal seem unconcerned about balancing individual liberty versus personal responsibility and social consciousness.   They also fail to appreciate that insurance—the pooling of community resources to cover risk—is inherently collective and rewards individuals with financial and healthcare security in return for the their support of others.  Secretary Price should stop promoting the illusory benefits of healthcare libertarianism and advocate instead for the health security of all the American people.       

The Secretary’s CAPG photo-op resembled a prince’s foray to a rebellious provincial outpost.  He did not brook questions from the assembled nor deign to meet the organization’s board.  He granted permission for four questions that were submitted and approved in advance.  The attendees might have been reminded of the Bourbon monarchs, who on their restoration to the throne of France to were said to “have forgotten nothing and learned nothing.”  The Republicans in Washington have certainly not forgotten their years of opposition to the ACA.  Their willingness and capacity to adapt and to learn more about U.S. healthcare needs in the post-ACA era remains uncertain.  Secretary Price’s recent visit to CAPG provided little cause for optimism.      

Why California Should Try Single Payer. Yes, We Said That.

Why California Should Try Single Payer. Yes, We Said That.

This Spring, California SB (Senate Bill) 562 proposed a single-payer healthcare financing system for California.  Governor Jerry Brown was immediately skeptical, stating, “This is called ignotum per ignotius….In other words, you take a problem and say, ‘I’m going to solve it by something that’s even a bigger problem,’ which makes no sense.”  And in early July, California Assembly Speaker Anthony Rendon tabled the bill calling it “woefully incomplete.”  While true, that incurred the predictable wrath of single payor advocates.

Understandably, it’s difficult for supporters not to be enthusiastic about SB 562 given the conclusions reached by the Political Economy Research Institute (PERI) based out of the University of Massachusetts, Amherst. PERI has released a Study commissioned by the California Nurses Association (which has always favored single payor universal coverage) that projects reductions in healthcare spending by $37.5 billion a year!  No small change there.

The Study reports that the proposed single payor system could provide “decent health care for all California Residents…” and while providing full universal coverage would increase overall system costs by about 10%, it “could” produce savings of about 18%.  The savings supposedly will be realized through reduced administrative costs, reducing pharmaceutical reimbursement charges, and “a more rational fee structure for providers.”  “More rational” usually means “reduced,” and that usually means primary care and mental health are the first in line to take it in the neck, given their limited negotiating leverage.

And it gets even better.  There would be no premiums, copays, or deductibles.  According to the Study, people could get treated whenever and wherever they want.  And money will be saved.  This is like heaven. 

There was much missing from SB 562.  For example, it did not include a funding mechanism in the Bill, leaving that to California’s Assembly.  It was strong on what but light on how.  That obviously troubled Speaker Rendon.  The PERI Study suggested a 2.3 percentage point increase in the State sales tax which would raise California sales taxes to 9.55% not including local add-ons, and a 2.3% business gross receipts tax on revenue exceeding $2 million. 

I admit to a modicum of skepticism as much as I welcome new and aggressive ideas.  But the theory of single payor universal coverage has been around for decades, and the last state that went down this path (Vermont) got a very rude financial awakening when the real numbers were toted up.    As the Boston Globe reported,

“The numbers were stunning. To implement single-payer, the analysis showed, it would cost $4.3 billion in 2017, with Vermont taxpayers picking up $2.6 billion and the federal government covering the rest. To put the figures into perspective, Vermont’s entire fiscal 2015 budget, including both state and federal funds, is about $4.9 billion.”

The Globe went on to report that the Vermont Governor’s office estimated needed tax increases on income and payroll that more than doubled existing taxes. The Governor, who ran on this issue, pulled the plug. 

California Governor Jerry Brown may well do the same in California if a final bill reaches his desk next year, but the Wall Street Journal, in an editorial that ran on June 12, urged him to consider just the opposite.  The WSJ editorial, most probably tongue-in-cheek, noted Governor Brown’s comment with the Latin phrase, and yet suggested that this concept be taken for a “test drive” by California, saying:

“ But if Mr. Brown believes this, maybe he should sign it and force progressives to live with the consequences before they foist another health-care experiment on the entire country.”

Not a bad point.  For years, politicians advised by liberal-leaning economists have been on a rant for just this.  Given the paucity of other more workable initiatives and the inability of Republicans in Congress to agree on much of anything, it may well be time to call the question once and for all.  And where better than California?

Of course, a universal coverage single payor system would save money right off the bat in some areas.  System-wide administrative costs indeed would be reduced.  Commercial insurers as we know them would be eliminated with their varied operating expenses, procedures, and the ever-present bureaucratic red tape. 

Employers would be relieved entirely of providing health insurance as a benefit.  [Might that incent more employers to move to California?]  Providers would have but one set of procedures and rules to comply with.  And given that there will be no copays, copayments, or deductibles, significant administrative burdens on providers (as well as some collections problems) will be eliminated.  While the savings would not constitute as big a portion of the overall coverage cost as some suggest, it represents real money in a one-time savings.  However, it does nothing for the other 85% or so of the cost of coverage, namely, the claims expense. 

Of course, the State of California, which would be the single payor, would incur some administrative costs in running the system, processing claims, managing networks, etc.  And if history is any guide, States usually are not uber efficient.  But if this were to be similar to Medicare, there is almost no management of care and very little other cost-control type activity or overview.  Good for reducing administrative expenses; bad for reducing claims expenses.  And to the extent California engages in cost-control activities, its administrative costs would increase, but at least there would be substantial economies of scale.  And those evil private insurers would (at last) be gotten rid of.

However, let it be repeated:  Once implemented, the administrative cost reduction would be a one-time reduction; thereafter, premium increases would resume unabated, and in fact, without cost-controls, they presumably would increase more rapidly than they have to date, unless the citizens of California undergo a huge transformation in lifestyles and how they use services. 

As difficult as it is to digest, the only way to truly reduce healthcare costs substantially and in increasing amounts over time is to reduce claims expense.  To do that, either fees must be reduced or reductions must be had in the per person rates of usage of services.  And as I have written repeatedly, the focus eventually must be on the rates of use of services by focusing on the chronically ill, and improving overall health.  THAT is the way, over time, to put increasingly large bites into the cost of healthcare. 

SB 562 does apparently proceed down the path of reducing fees (pharma and “a more rational fee structure” whatever that might mean), but reducing pharma charges is easier said than done.  Kudos, if California can do it; but it seems a far bigger problem than one that even a state as large as California can tackle alone.  SB 562 (of course) does not even dip its toes into the reduction of the use of services.  In fact, just the opposite given its aim of no copays or deductibles, and the ability to get care wherever Californians want without restriction.  Just sayin’.

Should California actually proceed down this path, I would encourage the State to keep close track of certain data so that we all can learn from the experience, such as:

  • Administrative expense saved solely on the payor side (one payor of enormous scale, elimination of commercial insurers, etc.)
  • Administrative expense saved on the provider side (only one set of rules, one set of claims forms, no copays, etc.)
  • The extent and cost of management of claims by the payor, if any
  • Changes up or down in fees paid to providers, and which providers experience the greatest increases or decreases
  • Changes in per capita rates of use of services by category
  • Changes in rates of emergency room and inpatient care use
  • Wait time particularly for primary care and mental health care
  • Polls of impacts on providers and particularly primary care
  • Financial impacts on hospital systems
  • Pharma costs
  • Member satisfaction

If California eventually proceeds on this course, I strongly urge them to engage in massive patient education on appropriate system access and self-care.  It must somehow reduce the rate of use of care to survive.

What is unstated in all of this would be the future role of employers, if any, in the financing of healthcare coverage.  Section 1c of the Bill states: “This act does not create any employment benefit, nor does it require, prohibit, or limit the providing of any employment benefit.”  Otherwise, the Bill is silent on employer-based coverage.  As I read it, employer-based coverage would disappear, and why not from the employers’ standpoint.  Presumably employers would be free to offer an added level of insurance as a perk, but why would they given the open-ended access of SB 562?

Indeed, some of today’s perversities in our healthcare financing system derive from the employer-based coverage anomalies.  No other country is like the US in that regard.  And it must be admitted that single payor universal coverage is much simpler.  Like education up to certain levels, it now becomes a right funded wholly by tax dollars.  Does burying its costs in our already choking level of taxes make it more palatable?  We did that with Medicare and Medicaid for years.

More and more commentators are edging toward varied forms of single payor or increased federal involvement.  For example, Dr. Dan Stone in his July 5 post to this website proposes what appears to be a more sensible approach, albeit one that takes us further down the path of single payor. 

However, David Johnson, while also discussing the current Congressional morass, warns:

“Constructive health reform does not require more money.  It does require redistributing healthcare resources away from acute and specialty care and into preventive health, chronic disease management and behavioral health services.  It also demands greater transparency, lower administrative costs and balanced regulatory oversite.

“The challenge is not what to do.  It’s how to do it.  Beyond the BCRA (Senate bill), Congress must find ways to stabilize health insurance markets, encourage innovation, incentivize health over care, increase coverage, improve access and reduce inequality?

Whew!  A mouthful.  But as an older lawyer once commented to me while we were considering litigation strategies, “It has the additional advantage of being the truth.”

Joe Flower keeps reminding us that we are having the wrong discussion.  Rather than obsessing on who pays, we must obsess on reducing how much we pay by making the systemic changes needed to reduce the need for payment.  In that regard, Republican attempts to make huge cuts to Medicaid without concomitant systemic changes seems short sighted.

So only partly tongue in cheek, I join in with the Wall Street Journal in inviting the great State of California, the home of so many other societal innovations, to take the plunge, adopt single payer universal coverage, and show the rest of the country how to do it.  One way or the other, we will learn something, I’d hope.  And isn’t that the Federalist way?

Who know?  Stranger things have happened, and we sure could use something like PERI forecasts.

Repair and Reboot

Repair and Reboot

I told you so.  I also told the POTUS in my open letter, but he did not read it. 

Who could honestly believe the nation would support dumping coverage for 22 million people?  As David Leonhard wrote recently op-ed in the New York Times: “They [Republicans and President Trump] had only one big weakness, in fact: They weren’t dealing in reality.”  When faced with reality, it is interesting what a few good Senators with a conscience will refuse to do. 

Success is never attained by taking shortcuts.  We do not need reform of health care; we need to reboot the entire system.  Special interests do not belong in the picture.  They are incompatible with developing innovative solutions that place profits on the back burner.   Congress is making this too difficult.  They need to roll up their sleeves, go back to the drawing board, and start again.  My suggestions:

Step 1:  Every member of Congress should participate in a mock hospital admission as a patient, starting with presentation to the ER, being poked and prodded, having surgery if necessary, and staying overnight to recuperate.  After your experience, you should be provided a “bill” on your way out the door and pay the balance by cash or check. 

Step 2:  Go see your own primary care physician for two reasons.  The first is to have an annual exam and to connect with your constituents in the waiting room, solicit their comments, thoughts, or suggestions, and converse with office staff to understand their perspective.  The second reason is to elicit feedback directly from your primary care physician.  Listen for groundbreaking solutions to the perplexing boondoggle of caring for greater numbers at a lower cost.

Extra credit:  Follow a primary care physician in a Health Professional Shortage Area (HPSA) for three days.  Listen, engage, clarify, empathize, and most importantly absorb how monumental this undertaking of reforming health care will be. 

Step 3: Return to Washington D.C. inspired and reboot, resolving to do it right this time. 

The nation has been having entirely the wrong conversation; that dialogue must change.  The biggest obstacle faced by lawmakers is maintaining access while reducing cost.  Providing coverage without coupling it to budgetary constraints is sheer lunacy.  However, reducing government involvement in coverage without ensuring the needy can afford health care will never garner widespread support.  Affordability has become an impossible dream and is currently our largest stumbling block. 

The U.S. spent $10,345 per person annually in 2016.  The average OECD country spends $3997 per person annually in comparison.  During the 1980’s Spain created a network of community health clinics within a 15 minute radius of every citizen, a system which was funded by the taxpayers.  In 1975, the average life expectancy from birth was equivalent in both nations, at 69 years of age.  Today, life expectancy in Spain is 83 years compared to 78.8 in the United States.  We are spending twice as much as Spain and our life expectancy is significantly lower. 

An appropriate policy goal would be to focus on developing a sustainable solution, implemented only after great deliberation.  Scaffolding already exists, in community clinics and Public Health departments; these facilities are cost-effective, yet grossly underfunded, underutilized, and unappreciated.  Every single man, woman, and child needs primary care services, a fact which in incompatible to the insurance model.  We must sever the connection between insurance and primary care.  Providing basic care universally is something we must accept as reality. As I have written before, investing in primary care as a solution is a no-brainer; increasing by one PCP/10,000 persons decreases mortality by 5.3%. 

Basic care will bring us all out from the shadows and into the light.  Provide immunizations, screenings, and annual exams to everyone in this country.  Those working in the community clinics will be employed by the government and salaried.  These clinics could have evening or weekend walk-in hours and handle urgent matters.  The electronic medical records system should be universal and patient-centric.  People will no longer live in fear of our government eliminating access for chronic conditions or emergencies.  Struggling families will not be one catastrophic illness away from losing their hopes and dreams. 

As we continue filling in the grid, specialty care should be added at the public health facilities or community clinics.  A specialist would cover a greater number of patients when overseeing or consulting on difficult cases with the primary care physicians.  These specialists would be employed by the government and salaried as well.  If an individual becomes severely ill or injured and requires very specialized treatment, hospitalization, or surgical management, either they have Medicaid, Medicare, or their catastrophic insurance plan kicks in to cover these needs. 

No discussion would be complete without including third party payers, who distance patients and physicians from being cognizant of cost.  For what we do in our offices, services could be far cheaper.  For example, a self-employed middle-aged patient with a $25,000 deductible sustained a 4cm laceration to the head and went to buy glue to repair it himself.  On this particular holiday weekend, the stores were already closed.  He inquired as to the cash price for repair after texting a picture. 

I had no answer, but primary care physicians love repairing lacerations and I am no exception to the rule.  He came to my office; I cleaned the wound and sutured it.  He handed me his credit card, similar to the cashier at a grocery or hardware store.  Supplies cost roughly $50; the laceration repair took 15 minutes.  I figured $150 seemed reasonable.  He paid $200 and was thrilled. 

While the lack of transparency hindered my research, I compared the cost to repair a 4 cm laceration in the emergency room.  The estimated charges were:  $1000 emergency room facility charge, physician cost $500, and the procedure bill was $200.  My hardworking patient would have coughed up $1700 at a minimum (some estimate as high as $1000 per stitch) and waited well over 15 minutes for the privilege. 

Allow the free market forces to remain a part of the infrastructure.  A great deal of the population fears a universal basic system because they are afraid of losing choice.  Direct Primary Care practices would flourish in a system with a basic care safety net for those in need.  Those who can afford choice would have options to patronize the private market, which absolutely should not be eliminated.   

Reviewing the events this week reminds me Rome was not built in a day. Repairing the tangled web of health care will take unconventional thinking and the tincture of time. Costs have spiraled out of control past the point of affordability.  The nation will only support reform once Congress overhauls our broken system prior to embarking on repealing anything.  Finally, everyone is profiting except the two most critical components: the physicians and their patients.  Repair, reboot, and rebuild from the ground up and when you do, start by putting patients ahead of profits.