by Michael Hiltzik - LA Times - August 15, 2017
The Congressional Budget Office weighed in Tuesday with another of its long-awaited analyses of aspects of repealing or tinkering with the Affordable Care Act. This time the topic is the ACA’s cost-sharing reduction subsidies, which reduce deductibles and co-pays for the lowest-income buyers of health coverage on the exchanges.
The CBO’s findings are timely because the so-called CSRs are the subsidies that President Trump continually threatens to withhold, as a tool for forcing Obamacare to “implode.” And, as expected, the CBO finds that canceling the subsidies would be a disaster — but for Republicans favoring that approach, not Democrats.
Its conclusion is especially germane to the question of what congressional Democrats should trade in return for a GOP agreement to keep the CSRs funded. Earlier this month, healthcare analyst Avik Roy argued that Republicans should demand lots of concessions, including repeal of the individual mandate and enactment of “premium-lowering regulatory reforms.” Roy didn’t specify these, but Republicans have talked about paring down the ACA’s list of essential health benefits, such as maternity, hospitalization and prescription coverage, which are mandated to be offered by any qualified health plan.
The CBO’s analysis, however, suggests that Democrats should take Michael Corleone’s approach from “The Godfather, Part II.” His line to a corrupt senator overplaying his hand was: “My offer is this: nothing.”
Obamacare supporters haven’t fully internalized this reality. The Democratic National Committee responded to the CBO report by quoting the agency as finding that if cost-sharing reduction subsidies were ended, millions of Americans would face skyrocketing premium increases of 20% by 2018 and 25% by 2020. Actually, the CBO didn’t say that. The premium increases it cited were gross increases, not factoring in premium subsidies, which would reduce the actual impact in many cases to zero.
Health insurance expert David Anderson of Duke got it exactly right: “Democrats have no reason to trade CSR funding for policies that they don’t prefer,” he observed. “Inaction gives them an incredible policy victory. Conservatives are the ones who need to make concessions to fully fund CSR.”
The fallout from CSR cancellation already is visible in early rate requests filed by insurers in several states. California insurers are seeking an increase averaging about 12.5% for next year — but almost double that if the CSRs are ended. Those rates are pre-subsidy, and Covered California, which manages the state’s insurance exchange, said that the average buyer could avert all or most of the increases through the subsidy and smart shopping.
The CBO says its analysis is based on the assumption that CSRs would be paid through the end of this year, but not thereafter. If the scenario changes — say the payments are cut off in midyear, after insurers already have set their annual premiums and signed up customers, the results could be more dire. In that event, however, Republicans would probably be blamed for the resulting market carnage, since it would be associated directly with GOP action.
Before we get into the counterintuitive details, a quick primer.
Cost-sharing reductions are offered to buyers in the individual market with incomes between 100% and 250% of the federal poverty limit. For a family of four, the eligible income range is $24,600 to $61,500. These subsidies are in addition to the ACA’s premium subsidies, which cover those with incomes up to 400% of the poverty level, or $98,400 for a family of four. Unlike the premium assistance, which technically is paid to the policyholder, the CSRs are advanced to the insurers based on the co-pays and deductibles they would otherwise charge. About half of all buyers of ACA plans are eligible for the CSR assistance, and about 90% receive premium subsidies.
The subsidies this year are expected to come to $7 billion, to be paid to insurers covering 7 million customers. The subsidies are authorized under the healthcare act, but House Republicans filed a lawsuit in 2014 asserting that because the money hadn’t been specifically appropriated, paying the money is illegal. They won the first round in U.S. District Court last year, but the judge stayed her ruling pending an appeals court decision.
Since his inauguration, Trump has dithered over whether to pay out the subsidies and continue fighting for them in court. On occasion, he’s threatened to kill the payments as a bargaining chip to force Democrats to negotiate an Obamacare repeal. Periodically, the plaintiff and government lawyers have to return to the appeals court to ask for a three-month hold in the case; the next scheduled appearance is Aug. 20. Recently, 17 states and the District of Columbia won the right to step in to defend the CSR payments if the Trump administration tries to withdraw from the case.
The CBO found that canceling the CSR subsidies might drive some insurers out of the individual market because of “uncertainty about the effects of the policy on average healthcare costs for people purchasing plans.” Those facing higher deductibles and co-pays might be less inclined to buy coverage. Regions with about 5% of the U.S. population might end up with no insurers in the individual market next year, the agency said. But by 2020, enough insurers would return to the market that almost no one would be left without insurance availability.
Insurers would, however, raise premiums to compensate for the loss of subsidies for deductibles and co-pays. It’s likely that insurers would load these higher premiums onto silver plans, the only plans that provide CSR subsidies. That would drive up gross premiums for silver plans by 20% next year, compared to their expected level without a policy change.
But because premium subsidies are tied to buyers’ incomes and rise as premiums rise, the subsidies would also increase — in fact, more Americans would be eligible. The CBO reckoned that many silver-plan buyers receiving subsidies would pay net premiums “similar to what they would pay if the CSR payments were continued.” Some buying skimpier, bronze plans, would receive sufficient subsidies to cover premiums and some of their deductibles and co-pays too. “The average subsidy would be greater, and more people would receive subsidies in most years.”
The federal government, however, would take a hit. Over 10 years, the CBO said, canceling the CSR payments would increase the federal deficit by $194 billion. So much for the fiscally responsible Republican Party.
The picture could be materially different if Trump follows through on his threat to cancel CSRs immediately. Any decision to terminate CSRs after insurers had begun charging premiums based on continued CSR funding, the CBO said, would cause them “significant financial losses.” Some would leave the marketplace immediately, leaving their enrollees without coverage in the middle of the year and causing a spike in the ranks of the uninsured.
Is Trump prepared to explain the consequences to the public? It’s doubtful. Many congressional Republicans know that for Trump to cancel the CSRs in midstream would hand them a poisoned chalice. Sen. Lamar Alexander (R-Tenn.), chair of the Senate Health, Education, Labor and Pensions Committee, told Roy he favors an affirmation by Trump of the CSRs at least through September, followed by congressional extension of the CSRs for one year. That would provide sufficient stability, Alexander said, to persuade the insurers to lower their rates.
Richard Master: A businessman makes the case for a single-payer health care system
by Richard Master - The Morning Call - August 1, 2017
With all due respect to President Trump, he is wrong about the single-payer model of health insurance.
Single payer — centralized public financing of a continued privately operated health system — will not "bankrupt the United States." In fact, the opposite is true.
Single payer is the only internationally proven strategy to transition the U.S. out of its current crisis of runaway health care costs to economic sustainability, where overall system cost growth is consistent with overall economic growth and inflation.
At one-sixth of our economy and over 25 percent of the federal budget, health care will continue to be a focus in Congress until real progress is made and the angst of the American people about the system is resolved. It is clear to most Americans that runaway health care costs translate into flat wages and also a deterioration of real disposable income that drags down our 70 percent consumer-driven economy.
But recent efforts in Congress to confront the crisis have been misguided. Congress has focused on cost shifting — moving the burden of our health system away from the federal government to the states and also to employers and to working families across the country, who will pay higher private insurance premiums to cover the expected cost of increased uncompensated care as the system absorbs the loss of Medicaid funds.
Going forward, the focus of the administration and its allies in Congress should be on controlling the real drivers of cost of care, such as prices of pharmaceuticals, which are rising at double digits a year, and addressing wasteful administrative costs associated with our complex, multipayer-financing model, which costs U.S. private doctors $83,000 a year to interact with multiple health plans vs. $22,000 for doctors in Canada, according to a 2011 Commonwealth Fund study. And it costs hospitals nearly double in administrative costs vs. other countries, according to a 2014 Commonwealth Fund study.
We do not need to reinvent the wheel. Single payer is the recognized best practice. Warren Buffet points out that, in the 1970s, Canada and the U.S. had roughly equivalent health system expense — 7 percent of gross domestic product. Canada went the single-payer route; the U.S. did not. Canada covers all of its citizens, has better health outcomes and today spends 11.4 percent of GDP. Our cost went to 18 percent of GDP. France, the highest ranked health system in the world, spends 11.8 percent of GDP, and Japan, 8.5 percent
We need to investigate and follow the examples of successful health systems operating throughout the world where all citizens are covered, public health outcomes are measurably superior and the overall cost to society is less.
We need to also review closely the many in-depth studies by prominent American economists reporting overall system savings from a transition to centralized financing. Consider in particular the May study, "Economic analysis of the healthy California single-payer health care proposal (SB-562)." That study, from four economists at the University of Massachusetts, demonstrated how single payer would reduce California's overall health care expense by 10 percent, even with universal care for all residents and assuming comprehensive benefits. (The bill has been referred to a legislative committee.)
The study found substantial savings in administration and pharmaceutical pricing and on mitigating the current high variance in fees for service providers. Today 7.5 percent of Californians have no health coverage and an additional 30 percent of those insured are considered underinsured and are particularly vulnerable to the economic consequence of serious illness. The status quo in California and throughout the country is unacceptable. The solution is single payer.
What do Americans want? According to an April Economist/YouGov poll, 60 percent of Americans favor a Medicare-for-all solution to replace the Affordable Care Act, and only 24 percent oppose it. Medicare for all is single payer.
During his campaign, President Trump promised to take on cronyism and refresh Washington. No better place to start than with the health care commercial sector. They spend more on lobbying Congress than any other business sector, and they get what they pay for — a Congress that focuses more on the commercial interests of an industry than it does on the well-being of patients, working families and the overall economy.
This is our big chance to do something great. Let's fix health care with single payer.
Richard Master is founder and CEO of MCS Industries Inc., Palmer Township, and executive producer of two documentaries,"Fix It: Healthcare at the Tipping Point" and "Big Pharma: Market Failure."
http://www.mcall.com/opinion/yourview/mc-single-payer-health-care-master-yv-0802-20170801-story.html
Democrats are starting a fierce internal debate. Finally.
by Katrina Vanden Heuvel - Washington Post - August 22, 2017
With President Trump flailing and even Republicans panning the GOP-controlled Congress, Democrats have begun a long-overdue debate about the party’s platform and strategy. Citizen movements and progressive political leaders such as Sens. Bernie Sanders and Elizabeth Warren are driving this debate. United in opposition to Trump’s reactionary agenda, they are calling on Democrats to embrace a bolder agenda for change. While many Beltway pundits warn against Democratic division, the party’s congressional leaders — Nancy Pelosi and Charles E. Schumer — understand that this has been a long time coming.
The “Better Deal” platform put forth by Senate Minority Leader Schumer (N.Y.) and House Minority Leader Pelosi (Calif.) received justified gibes on its framing and language. But its premise was exactly right. As Schumer put it in the New York Times, “In the last two elections, Democrats, including in the Senate, failed to articulate a strong, bold economic program [and] failed to communicate our values to show that we were on the side of working people, not the special interests. We will not repeat the same mistake.”
The Better Deal essentially endorses the big debate about a reform agenda that has already begun inside and outside the Democratic Party. Democratic failure isn’t about Vladimir Putin or James B. Comey or Hillary Clinton’s emails. Since Barack Obama was elected in 2008, Democrats have lost the White House, both houses of Congress and about 1,000 state legislative seats. Republicans now have total control in a record 26 states. Clearly, a major debate about the party’s agenda, strategy and leadership is sorely needed.
Pelosi and Schumer are trying to corral this debate. Progressives such as Sanders (I-Vt.) and Warren (D-Mass.) and the Congressional Progressive Caucus are trying to expand it. But citizen movements are the ones truly driving it.
The first priority of these groups has been to stiffen the spines of Democrats and enforce unity in opposition to the right-wing agenda of Trump and the Republican Congress. The mobilization against the Republican health-care plan, which would have stripped millions of health care to pay for tax cuts for the few, included virtually the entire activist base of the party — unions, senior groups, women’s and civil rights groups, online activists such as MoveOn.org, grass-roots groups such as People’s Action, and more. They enforced Democratic unity while challenging Republicans in their offices and town-hall meetings.
Democrats unveiled an economic platform on July 24 that included plans to address unfair market competition, rising pharmaceuticals costs and stagnant wages.(Reuters)
The second priority has been to push Democrats and their agenda. Fight for $15 has pushed the plight of low-wage workers onto the national agenda. Black Lives Matter demonstrations forced Democrats to address police brutality and sentencing reform. Planned Parenthood and NARAL Pro-Choice have led opposition to Republican efforts to roll back women’s right to control their bodies. The Rev. William Barber’s Moral Mondays movement in North Carolina provides a model of an interracial coalition fighting for political and economic reform. National Nurses United and former Sanders campaign activists have driven Medicare-for-all onto the national agenda.
The challenge hasn’t been limited to single-issue groups. The insurgent Sanders campaign has unleashed activist energy across the country. Sandernistas are running for party offices, challenging sitting legislators and pushing to rewrite state platforms. Warren, Sanders, Jeff Merkley (Ore.) and Sherrod Brown (Ohio) in the Senate and Keith Ellison (Minn.), Mark Pocan (Wis.), Raúl M. Grijalva (Ariz.) and Congressional Progressive Caucus members in the House have challenged the limits of the Democratic agenda on everything from antitrust policy to money in politics to breaking up Wall Street.
Now a broad collection of groups, the Millions of Jobs Coalition, has begun pushing Democrats to unite on a set of principles, detailed in House Concurrent Resolution 63 on how to rebuild America the right way. They demand public investment, not corporate giveaways, prioritize 21st-century clean-energy programs and jobs, want guarantees for racial and gender equity, would put the needs of disadvantaged rural and urban communities first, and call for enforcing “buy-American” and basic labor agreements to ensure that good American jobs are created.
Of course, Trump and Republicans still set the national agenda, with tax cuts and infrastructure being two possibilities. A broad coalition of more than 400 groups called Americans for Tax Fairness champions progressive tax reform that helps make the rich and corporations pay their fair share — a stance that enjoys overwhelming public approval. Similarly, activists will challenge Trump’s infrastructure plan, which appears to feature the worst forms of crony capitalism: “public private partnerships” that privatize highways and bridges and impose tolls on users; tax giveaways to companies stowing profits abroad.
Pelosi and Schumer have already embraced the $15 minimum wage, a $1 trillion public infrastructure agenda, an aggressive antitrust agenda and a balanced trade agenda that begins to unpack the corporate trade policies championed by Presidents Bill Clinton and Obama. But these battles on economic issues — as well as the continuing debate over social issues such as choice and money and politics — will continue to roil Democrats. Activists will fight to put Medicare for all, progressive tax reform and public infrastructure investment on that agenda. The debate about strategy, about money in politics, about the Wall Street wing of the party will grow ever more fierce.
Already Beltway voices are fretting about division, about Democrats shooting at one another, about the need for unity in order to win in 2018. But a fierce debate is unavoidable. The party establishment won’t change on its own, despite its remarkable record of consistent failure. The money wing of the party won’t cede its hold without a fight. Democratic leaders won’t see the light unless they feel the heat.
Establishment Democrats count on Trump’s grotesqueries to unify and mobilize Democrats. But if Hillary Clinton’s campaign taught us anything, it is that simple opposition or “resistance” to Trump is not enough. Democrats can’t even mobilize their own base to vote — particularly in off-year elections — unless they champion a bold program that offers a credible promise of change to the vast majority of Americans. Pelosi and Schumer have recognized that. The resulting debate is not only long-overdue, it is also utterly necessary if Democrats are to begin winning elections again.
Where Are the Single-Payer Wonks?
by Clio Chang - New Republic - August 3, 2017
In the heat of the 2016 Democratic primary, Bernie Sanders released one of his signature proposals: Medicare-for-All. In response, economists, policy experts, and the liberal media all hammered the plan: Vox’s Ezra Klein called it “puppies-and-rainbows” and Paul Krugman wrote at The New York Times that “Sanders ended up delivering mostly smoke and mirrors.” The Urban Institute released an analysis that contended that Sanders’s proposal would have cost twice what the campaign had projected. Sanders’s plan was dragged for being vague, unrealistic, and light on the nuts and bolts.
Now, Sanders is gearing up for another go. Following the latest death of the zombie-like Trumpcare, he has stated that he will introduce single-payer legislation to the Senate. A lot is riding on the hope that Sanders’s new bill will be a robust piece of legislation. The political landscape has changed drastically since 2016, with progressives demanding more radical action to shore up and build upon the gains made by Obamacare. Among Democrats, support for single-payer has increased by 19 percentage points over the past three years. And for the first time in history, a majority of Democrats in the House have signed on as co-sponsors to Representative John Conyers’s Medicare-for-All bill.
But it’s hard to deny that single-payer is an area where progressive politics has outstripped policy. Conyers’s bill is largely seen as a symbolic piece of legislation, and not only because Democrats would first have to win back Congress and the White House to even begin passing it. As Joshua Holland wrote on Wednesday in The Nation, the momentum for single-payer is “tempered by the fact that the activist left, which has a ton of energy at the moment, has for the most part failed to grapple with the difficulties of transitioning to a single-payer system.”
We have seen this dynamic play out in real time in California, where the country’s most promising single-payer bill floundered on the details of the legislation. And on a national level, there is little clarity around an actual plan with comprehensive steps to genuine universal coverage. For a party that prides itself on being the country’s only rational, empirical party, where are the Democrats’ famed wonks on single-payer?
As Harold Pollack, a health policy researcher at the University of Chicago, told Holland, “There has not yet been a detailed, single-payer bill that’s laid out the transitional issues about how to get from here to there. We’ve never actually seen that. Even if you believe everything people say about the cost savings that would result, there are still so many detailed questions about how we should finance this, how we can deal with the shock to the system, and so on.”
This failure to sketch out a plan speaks less to the pie-eyed idealism of activists than to the lack of an existing policy infrastructure in support of single-payer. This lack is most evident in the think tank class. Large policy shops like the Brookings Institution and the Center for American Progress have focused instead on criticizing Republican health care efforts or pushing for bipartisan reform options.
Smaller and more explicitly progressive think tanks, such as the Economic Policy Institute, Demos, and the Roosevelt Institute, are stacked with left-leaning scholars on subjects like the minimum wage, voting rights, and anti-trust policy, but are less in the business of churning out policy proposals for legislators, especially when it comes to health care. While some groups, such as the Physicians for a National Health Program (PNHP), an organization that pushes for single-payer, have been at the forefront of the issue, the bulk of the think tank world has been focused on defending the ACA.
As Adam Gaffney, an instructor at Harvard Medical School and board member of PNHP, told the New Republic, “When something seems very far away, the need for that kind of detailed policy work sometimes seems less.” But now that single-payer is no longer an idea on the fringe, the actual mechanics have to be in place to maintain its credibility. “Bernie is going to come out with a bill and I want it to be as strong as possible,” Vijay Das, senior campaign strategist at Demos, told me. “I want it to live up to scrutiny of the right and the left.”
This weakness in left-leaning policy work goes beyond single-payer. “Broadly speaking, I think left politics needs more detailed, thorough, and rigorous policy work,” Gaffney says. “We absolutely need better and more policy on the left.” While the Heritage Foundation and the Center for American Progress are seen as policy feeders for right-wing and center-left politicians, respectively, there is no such equivalent for the more progressive space. Jacob Hacker, a political scientist at Yale, points out that there are many academics doing this work outside of the think tank sphere, but as scholars they are often removed from late-in-the-pipeline policy development that is essential for politicians and policy-makers. “There is a problem in terms of progressive policy development, but it’s not a problem of there being an absence,” Hacker says. “The problem is where it’s coming from and what its character is.”
Part of the problem may stem from the Democratic Party’s technocratic bent. No one would accuse Democrats of lacking in the ability to churn out detailed and complex policy work: In the 2016 election, Hillary Clinton released dozens of policy blueprints, which continue to stand in sharp contrast to the Republicans’ brazen ignorance of the most elementary policy details. But this kind of in-the-weeds work is often removed from the long-term vision that comes with grassroots mobilizing. Liberal think tanks often work in the realm of political possibility, rather than setting ideological goals and then working towards them. This means that, with the sudden burst of energy on the left for more far-reaching policies, Democratic politics has left much of the think tank world scrambling to keep up.
Contrast this with right-wing think tanks, many of which are couched within a larger Koch network that has spent the last few decades waging a war of ideas. As detailed in Jane Mayer’s Dark Money, the Koch brothers have tirelessly poured hundreds of millions of dollars not only into electing candidates, but also into the policy arena of think tanks and universities. This investment is part of a long-term strategy to push libertarian policies, once residing on the far-right fringe, into the mainstream. While liberal policy is lagging behind liberal politics, the Kochs engineered the opposite situation, in which policy pushed politics toward their corporate-libertarian vision of society.
Much of this difference in strategy is due to the fact that the wealthy donor class is more naturally inclined to lean right. A Demos study found that Republican donors are much more conservative than Republican voters, whereas Democratic donors are more closely aligned to Democratic voters.
The right wing, led by a fantastically wealthy coterie of industrialists, has essentially weaponized policy. “Historically conservatives, particularly the Koch network, have been better at thinking of policy as a way to not only achieve technical ends but to also change the political landscape, either by weakening their opponents or strengthening their allies,” Alexander Hertel-Fernandez, political scientist at Columbia University, told me. Hertel-Fernandez sees an opportunity for the left to learn from the right by conceiving of policy as a way to shift politics in a durable way. He points to the payroll tax cuts in Barack Obama’s 2009 stimulus plan, which achieved a technical end of providing workers with more disposable income, but failed to convince Americans that the equivalent of handing out cash to people is a great way to fight recessions. A majority of voters did not even know that their taxes had actually gone down. “People fixate on what are the technical fixes, but policies have to be popular,” Hertel-Fernandez says.
This shift might require bringing the grassroots into the policy shops. Experts in both the spheres of organizing and policy work emphasized that the solution does not necessarily lie in the creation of a new “left” think tank, which would only add to a crowded and fragmented ecosystem. Instead, many believe that the answer is greater integration between existing movements and policy organizations. “There’s often a disconnect between think tanks and real organizing that’s happening on the ground,” Ben Palmquist, campaign manager at the National Economic & Social Rights Initiative, told the New Republic. “We need more cross-fertilization, not just conversations and sharing of information, but actual collaboration.”
The Democratic policy infrastructure has proven itself extremely capable at churning out white papers for the center-left. Left-leaning activists and donors should be pushing this infrastructure to make an investment in more transformative progressive ends. It took years to lay the groundwork for Obamacare, and it will take years to do the same for single-payer or a similar program. Now is the time for the left to finally start waging its own war of ideas.
A Start-Up Suggests a Fix to the Health Care Morass
by Farad Manjoo - NYT - August 16, 2017
WINFIELD, Kan. — If you watched the drama in Washington last month, you may have come away with the impression that the American health care system is a hopeless mess.
In Congress, a doomed plan to repeal the Affordable Care Act, President Obama’s health care law, has turned into a precarious effort to rescue it. Meanwhile, President Trump is still threatening to mortally wound the law — which he insists, falsely, is collapsing anyway — while his administration is undermining its being carried out.
So it is surprising that across the continent from Washington, investors and technology entrepreneurs in Silicon Valley see the American health care system as the next great market for reform.
Some of their interest is because of advances in technology like smartphones, wearable health devices (like smart watches), artificial intelligence, and genetic testing and sequencing. There is a regulatory angle: The Affordable Care Act added tens of millions of people to the health care market, and the law created several incentives for start-ups to change how health care is provided. The most prominent of these is Oscar, a start-up co-founded by Joshua Kushner (the younger brother of Mr. Trump’s son-in-law, Jared Kushner), which has found ways to mine health care data to create a better health insurance service.
But perhaps the most interesting and potentially groundbreaking company created in connection with the Affordable Care Act is Aledade, a start-up founded in 2014 by Farzad Mostashari, a doctor and technologist who was the national coordinator for health information technology at the Department of Health and Human Services in the Obama administration.
Aledade, which has raised about $75 million from investors, has an agenda so ambitious it sounds all but impossible: Dr. Mostashari wants to reduce the cost of health care while improving how patients are treated. He also wants to save the independent primary care doctor, whose practices have been battered by the perverse incentives of the American health care system.
And here is the most interesting part: His plan is working.
A few weeks ago, I visited two primary care practices in southeast Kansas that have worked with Aledade for more than a year. Their operations had been thoroughly remade by the company. Thanks to Aledade, the practices’ finances had improved and their patients were healthier. On every significant measure of health care costs, the Aledade method appeared to have reduced wasteful spending.
“The whole idea is to align incentives between society and doctors and patients,” Dr. Mostashari said, adding that Aledade has helped reduce hospital readmissions and decrease visits to specialists in many of its markets. “We’re reducing unnecessary and harmful utilization and improving quality of care.”
Of course, such promises are not new at the intersection of health and technology. Many companies have made big bets and blown up — among them Theranos, the lab testing start-up, which turned out to have been more puffery than product. Aledade faces its own share of hurdles, including whether its investors can ride out a long and costly expansion before it starts to realize any big paydays.
Still, its plan — which mainly involves using software to achieve its goals — looks promising.
The American health care system is a fragmented archipelago, with patients moving through doctors’ offices and hospitals that are often disconnected from one another. As a result, many primary care physicians — who often see themselves as a kind of quarterback who calls the shots on a patient’s care — have no easy way to monitor a patient’s meandering path through the health care system.
Aledade’s software addresses that by collecting patient data from a variety of sources, creating a helicopter view. Doctors can see which specialists a patient has visited, which tests have been ordered, and, crucially, how much the overall care might be costing the health care system.
More important, the software uses the data to assemble a battery of daily checklists for physicians’ practices. These are a set of easy steps for the practice to take — call this patient, order this vaccine — to keep on top of patients’ care, and, in time, to reduce its cost.
For example, say you’re a doctor at a small practice in rural Kansas and one of your patients, a 67-year-old man with heart disease, has just gone to the emergency room.
“In the past, we’d only find out our patients were at the hospital maybe weeks afterward,” said Dr. Bryan Dennett, who runs the Family Care Center in Winfield, Kan., with medical partner, Dr. Bryan Davis. With Aledade, Dr. Dennett is now alerted immediately, so “we can call them when they’re at the emergency room and say, ‘Hey, what are you doing there? Come back here, we can take care of you!”
It is not just emergency room visits. Aledade tells doctors which of their patients is eligible for preventive care like vaccines or an “annual wellness visit.” The doctors said that during such visits they have discovered several conditions that would have ballooned into much bigger problems without treatment. The software lets doctors know when their patients have been discharged from the hospital, allowing them to schedule “transitional care management” visits.
Such visits are a gimme for the health care system — they have been proved to reduce hospital readmissions (which are extremely costly), and patients say they find them valuable in navigating the health care system. And because these visits are so effective at lowering overall health care costs, Medicare pays doctors a higher rate to provide such care — meaning that primary care doctors can make money by following Aledade’s alerts.
Yet even though Aledade thinks of itself as a technology company, its doctors said its software is the least interesting thing it does. Independent primary care doctors tend to be cautious about technology, especially if it seeks to thoroughly alter how they work. So the real battle Aledade faces is to integrate technology into doctors’ practices — and to do so in an nonintrusive and pleasing way. The software’s instructions must also prove financially rewarding for clinics, while still somehow saving money for the overall health care system.
To do all this, Aledade — which now operates in 15 states and has relationships with more than 1,200 doctors — has had to become more than a software company. It has hired a battalion of field coordinators who visit practices and offer in-depth training and advice.
The company has also taken advantage of several health care ideas that were introduced or accelerated by the Affordable Care Act. One of these is known as the accountable care organization, or A.C.O., which lets groups of health care providers unite to coordinate care for a patient. Studies have shown that such a structure lowers overall medical costs; under the Affordable Care Act, Medicare encouraged the formation of these organizations by promising to share any savings it realizes with doctors. Aledade took the accountable care organization idea and made it its primary business model. (The structure was reaffirmed by a 2015 law passed overwhelmingly by Congress, so a repeal of the Affordable Care Act would not have affected its structure.)
For Aledade, the upshot is that it will only make a lot of money if it actually succeeds in reducing health care costs.
“Say Medicare thinks that it’s going to spend $100 million next year on our patients in Kansas,” Dr. Mostashari said. “A lot of this is from bad stuff — hospitalization, complications, you know, bad stuff. So we come in and say, if we can work with the primary care doctors to reduce bad things from happening while increasing quality, then we can save money for Medicare. Medicare says we thought we were going to spend $100 million on those patients, and we only spent $90 million. So, Medicare keeps half of the savings, and the other half of it goes to Aledade — which we split with the doctors.”
In addition to Medicare, Aledade has begun signing up several commercial health insurance companies under similar cost-savings plans. But given that the company gets paid only when it cuts health care costs (while improving health outcomes), Aledade and its investors are making a gamble.
In its first year of operation, for instance, Aledade managed to cut many costly procedures, yet its savings did not meet Medicare’s benchmark — meaning it realized virtually no revenue from the savings program.
The results for its second year are due in October. This time, because Aledade said its savings grow over time, the company is likely to begin making money. “We’re very confident in our model,” Dr. Mostashari said.
WINFIELD, Kan. — If you watched the drama in Washington last month, you may have come away with the impression that the American health care system is a hopeless mess.
In Congress, a doomed plan to repeal the Affordable Care Act, President Obama’s health care law, has turned into a precarious effort to rescue it. Meanwhile, President Trump is still threatening to mortally wound the law — which he insists, falsely, is collapsing anyway — while his administration is undermining its being carried out.
So it is surprising that across the continent from Washington, investors and technology entrepreneurs in Silicon Valley see the American health care system as the next great market for reform.
Some of their interest is because of advances in technology like smartphones, wearable health devices (like smart watches), artificial intelligence, and genetic testing and sequencing. There is a regulatory angle: The Affordable Care Act added tens of millions of people to the health care market, and the law created several incentives for start-ups to change how health care is provided. The most prominent of these is Oscar, a start-up co-founded by Joshua Kushner (the younger brother of Mr. Trump’s son-in-law, Jared Kushner), which has found ways to mine health care data to create a better health insurance service.
But perhaps the most interesting and potentially groundbreaking company created in connection with the Affordable Care Act is Aledade, a start-up founded in 2014 by Farzad Mostashari, a doctor and technologist who was the national coordinator for health information technology at the Department of Health and Human Services in the Obama administration.
Aledade, which has raised about $75 million from investors, has an agenda so ambitious it sounds all but impossible: Dr. Mostashari wants to reduce the cost of health care while improving how patients are treated. He also wants to save the independent primary care doctor, whose practices have been battered by the perverse incentives of the American health care system.
And here is the most interesting part: His plan is working.
A few weeks ago, I visited two primary care practices in southeast Kansas that have worked with Aledade for more than a year. Their operations had been thoroughly remade by the company. Thanks to Aledade, the practices’ finances had improved and their patients were healthier. On every significant measure of health care costs, the Aledade method appeared to have reduced wasteful spending.
“The whole idea is to align incentives between society and doctors and patients,” Dr. Mostashari said, adding that Aledade has helped reduce hospital readmissions and decrease visits to specialists in many of its markets. “We’re reducing unnecessary and harmful utilization and improving quality of care.”
Of course, such promises are not new at the intersection of health and technology. Many companies have made big bets and blown up — among them Theranos, the lab testing start-up, which turned out to have been more puffery than product. Aledade faces its own share of hurdles, including whether its investors can ride out a long and costly expansion before it starts to realize any big paydays.
Still, its plan — which mainly involves using software to achieve its goals — looks promising.
The American health care system is a fragmented archipelago, with patients moving through doctors’ offices and hospitals that are often disconnected from one another. As a result, many primary care physicians — who often see themselves as a kind of quarterback who calls the shots on a patient’s care — have no easy way to monitor a patient’s meandering path through the health care system.
Aledade’s software addresses that by collecting patient data from a variety of sources, creating a helicopter view. Doctors can see which specialists a patient has visited, which tests have been ordered, and, crucially, how much the overall care might be costing the health care system.
More important, the software uses the data to assemble a battery of daily checklists for physicians’ practices. These are a set of easy steps for the practice to take — call this patient, order this vaccine — to keep on top of patients’ care, and, in time, to reduce its cost.
For example, say you’re a doctor at a small practice in rural Kansas and one of your patients, a 67-year-old man with heart disease, has just gone to the emergency room.
“In the past, we’d only find out our patients were at the hospital maybe weeks afterward,” said Dr. Bryan Dennett, who runs the Family Care Center in Winfield, Kan., with medical partner, Dr. Bryan Davis. With Aledade, Dr. Dennett is now alerted immediately, so “we can call them when they’re at the emergency room and say, ‘Hey, what are you doing there? Come back here, we can take care of you!”
It is not just emergency room visits. Aledade tells doctors which of their patients is eligible for preventive care like vaccines or an “annual wellness visit.” The doctors said that during such visits they have discovered several conditions that would have ballooned into much bigger problems without treatment. The software lets doctors know when their patients have been discharged from the hospital, allowing them to schedule “transitional care management” visits.
Such visits are a gimme for the health care system — they have been proved to reduce hospital readmissions (which are extremely costly), and patients say they find them valuable in navigating the health care system. And because these visits are so effective at lowering overall health care costs, Medicare pays doctors a higher rate to provide such care — meaning that primary care doctors can make money by following Aledade’s alerts.
Yet even though Aledade thinks of itself as a technology company, its doctors said its software is the least interesting thing it does. Independent primary care doctors tend to be cautious about technology, especially if it seeks to thoroughly alter how they work. So the real battle Aledade faces is to integrate technology into doctors’ practices — and to do so in an nonintrusive and pleasing way. The software’s instructions must also prove financially rewarding for clinics, while still somehow saving money for the overall health care system.
To do all this, Aledade — which now operates in 15 states and has relationships with more than 1,200 doctors — has had to become more than a software company. It has hired a battalion of field coordinators who visit practices and offer in-depth training and advice.
The company has also taken advantage of several health care ideas that were introduced or accelerated by the Affordable Care Act. One of these is known as the accountable care organization, or A.C.O., which lets groups of health care providers unite to coordinate care for a patient. Studies have shown that such a structure lowers overall medical costs; under the Affordable Care Act, Medicare encouraged the formation of these organizations by promising to share any savings it realizes with doctors. Aledade took the accountable care organization idea and made it its primary business model. (The structure was reaffirmed by a 2015 law passed overwhelmingly by Congress, so a repeal of the Affordable Care Act would not have affected its structure.)
For Aledade, the upshot is that it will only make a lot of money if it actually succeeds in reducing health care costs.
“Say Medicare thinks that it’s going to spend $100 million next year on our patients in Kansas,” Dr. Mostashari said. “A lot of this is from bad stuff — hospitalization, complications, you know, bad stuff. So we come in and say, if we can work with the primary care doctors to reduce bad things from happening while increasing quality, then we can save money for Medicare. Medicare says we thought we were going to spend $100 million on those patients, and we only spent $90 million. So, Medicare keeps half of the savings, and the other half of it goes to Aledade — which we split with the doctors.”
In addition to Medicare, Aledade has begun signing up several commercial health insurance companies under similar cost-savings plans. But given that the company gets paid only when it cuts health care costs (while improving health outcomes), Aledade and its investors are making a gamble.
In its first year of operation, for instance, Aledade managed to cut many costly procedures, yet its savings did not meet Medicare’s benchmark — meaning it realized virtually no revenue from the savings program.
The results for its second year are due in October. This time, because Aledade said its savings grow over time, the company is likely to begin making money. “We’re very confident in our model,” Dr. Mostashari said.
Republicans organize to raise concerns about Medicaid expansion in Maine
by Scott Thistle - Portland Press Herald - August 21, 2017
AUGUSTA — Several Republican lawmakers are expected to announce their concerns Tuesday about expanding Medicaid, a first step toward what could become a formal campaign to oppose the question voters will face on the Nov. 7 ballot.
Rick Bennett of Oxford, a former Maine Senate president and former chairman of the Maine Republican Party, will join three sitting Republican lawmakers at an 11 a.m. State House news conference to make an announcement of “importance to Maine taxpayers, senior citizens and families,” said Brent Littlefield, a Washington-D.C.-based political consultant who also advises Gov. Paul LePage and Maine’s 2nd District U.S. Rep Bruce Poliquin.
The news conference is not meant to be a kickoff event for a campaign opposing Question 2, which would expand Medicaid in Maine under the federal Affordable Care Act, also known as Obamacare, Littlefield said.
“It’s going to be much more specific than that,” he said. But he noted that a campaign may follow.
Joining Bennett at the news conference will be Reps. Heather Sirocki, R-Scarborough; Paula Sutton, R-Warren; and Stephanie Hawke, R-Boothbay Harbor.
Maine Equal Justice Partners, a progressive advocacy group for low-income people, gathered more than 67,000 signatures of registered Maine voters to put the Medicaid expansion question on the Nov. 7 ballot. The proposal would expand Medicaid coverage to adults under 65 who earn below $16,000 for a single person and $22,000 for a family of two.
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Currently, 19- and 20-year-olds, individuals with disabilities, the elderly and certain low-income parents qualify for Medicaid, which operates as MaineCare.
David Farmer, a spokesman for the expansion campaign, has said it will “reduce the number of people without health insurance, it will create jobs.”
The federal Centers for Disease Control and Prevention has called Maine’s uninsured rate of 8.8 percent in 2015 an all-time low, but Maine Hospital Association President Steven Michaud has said state eligibility rules cut MaineCare enrollment by 75,000 people in recent years, according to The Associated Press.
Michaud said that move shifted costs to Maine hospitals, which are providing about $250 million a year in charity care while Medicaid payments to hospitals are decreasing.
Expanding Medicaid is estimated to cost Maine $54 million each year once it is fully implemented, according to the ballot question’s fiscal note.
That figure includes $27 million in estimated savings and the cost of 103 new state positions to administer the expansion. The federal government would chip in $525 million each year, and lawmakers would have to appropriate the $54 million if the ballot question passes.
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But Republican opponents to the expansion, including Gov. Paul LePage, have said the expansion, even with the matching federal funds, would decimate the state budget and cause the Legislature to increase state tax rates to cover the shortfalls.
LePage has repeatedly told radio talk show hosts the expansion would set the state’s fiscal house in disarray for decades to come. Also in question is whether the Affordable Care Act will remain in place under President Trump and a Republican-controlled Congress, where both lawmakers and Trump have promised to repeal and replace the landmark law, which is considered a key accomplishment of former President Obama.
The ACA provides federally matching Medicaid funds for states that expand the health insurance program for the nation’s poorest citizens, and while the repeal effort has yet to succeed, the issue remains a top concern for lawmakers in Washington. Under the ACA, states that expand Medicaid would see a gradual tapering of the federal reimbursement rate to a low of 90 percent of a state’s expansion costs in 2020
The New Republic piece makes way too much of the ostensible neglect of policy implementation issues by single [payer supporters, but it is absolutely correct that the right is far better at this sort of thing. (See Nancy MacLean's book Democracy in Chains.) And what makes them so good isn't so much their ability to flesh out technical details of implementation of their ideas (look at the mess they made of "repeal and replace") as their ability to meld program and strategy. Their program of privatizing everything is achieved by doing everything they can to render public programs unworkable. We need to think strategically too.
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