Why Haven's Encounter With Reality Proved Fatal
— Ex-CEO Gawande explains what went wrong for "model" healthcare venture
by Cheryl Clark - MedPage Today - February 19, 2021
When they made their bold announcement in mid 2018, three corporate powerhouses -- Berkshire Hathaway, Amazon, and JP Morgan Chase -- were going to revolutionize the healthcare delivery system. They would lower costs and improve quality and overall outcomes for their 150,000 workers.
After all, they had author, innovator, and surgeon Atul Gawande, MD, at the helm. It would show the rest of the country and world how healthcare should work.
But less than three years later, the companies acknowledged the effort known as Haven would dissolve by the end of this month. Gawande had already stepped down as CEO in May 2020. What went wrong?
In an hour-long "grand rounds" discussion Thursday with Robert Wachter, MD, chair of the University of California San Francisco's department of medicine, Gawande provided a post-mortem.
In a nutshell, the concept was fatally flawed, he said, in so many words.
On the good side, he said, the effort accomplished a lot. In its two and a half years of existence, Haven's thought leaders designed a coverage model with no co-insurance, no deductibles, no cost for 60 critical drugs, and low-cost mental health services and primary care.
But the pandemic brought home a critical point. "We have an employer-based system. A job-based system is a broken system in a world where people are moving every couple of years to different roles and many, many, kinds of jobs," he said.
"The pandemic has really brought this out in spades," he said, as the lockdowns cost many workers their jobs, and thus the health insurance that came with them.
"The vulnerability we have of tying your healthcare to your job, that remains still a big hill to climb, and the government has to solve it. That is a public core issue that we still have not faced up to," Gawande said.
A job-based healthcare system, he said, only cares about costs this year, not over the life of the worker. "That's why we have fights over whether we'll pay for a hepatitis C treatment that costs $50,000 and up but avert $1 million in costs over the course of a life. We need that life-course commitment and view, and we have not aligned around that," he said.
That wasn't the only reason Haven is dissolving, however. Making an insurance plan work for three different companies whose employees were in different cities, with different populations and organizational cultures, was a daunting task.
"Once that became clear, then Haven threatens to become a very expensive think tank," Gawande said. The original thought was that it would assume responsibility for benefits management at the three companies, he explained. But it eventually became clear that "didn't have the potential to say we'll take over all of the benefits and running of the insurance for all you three organizations and then add more and more and more and more."
But Gawande doesn't think Haven was a failure. Not at all.
"It definitely did not become what we thought it would be," he acknowledged. But it did give him certain skills and organizational knowledge that enabled him to start a new effort, called CIC Health, which launched COVID testing efforts in the Boston area last fall and now has major COVID vaccination efforts at Fenway Park and another site later this month.
Gawande has written several best-selling books about healthcare and numerous articles for The New Yorker. His latest, from Feb. 8, describes the conflicts in a North Dakota county where politics and resistance to mask-wearing and physical distancing through this fall led to the highest rate of COVID spread and hospitalizations in the country.
He also was a member of the Biden-Harris COVID-19 Transition Advisory Board until last month.
Gawande remains heavily involved in Ariadne, a research lab run jointly by the Harvard T.H. Chan School of Public Health and Brigham and Women's Hospital that designs and tests healthcare delivery innovations. Gawande, who founded and was former executive director of Ariadne, is now the chairman.
https://www.medpagetoday.com/special-reports/exclusives/91274?
Editor's Note -
The preceding article about the failure of Haven Healthcare, despite the leadership of super-star Atul Gawande and the participation of mega-corporations Berkshire-Hathaway, Amazon and JP Morgan-Chase, is interesting. Evidently it took them three years and many millions of $$ to "discover" the fatal flaw in their model - reliance on employment-based health insurance. Duh!!
But there was another failure not mentioned in the article - the failure on the part of Gawande and other so-called "thought leaders" in the American health care policy world to even mention Medicare for All as the best solution to the problems of American healthcare. M4A would not only guarantee access to care for all Americans and effectively control soaring costs, but it would turn our attention to putting the patient, not the bottom line, first.
As long as that spinelessness continues, we are giving our equally spineless politicians and media a pass to continue the hot air festival that characterizes our public debate about healthcare reform.
-SPC
Too Much Choice Is Hurting America
Learning from subprime, health care and electricity.
by Paul Krugman - NYT - March 1, 2021
Dan Patrick, the lieutenant governor of Texas, is clearly what my father would have called a piece of work.
Early in the pandemic he made headlines by saying that older Americans should be willing to risk death so that younger people could “get back to work.” More recently, he suggested that Texans who found themselves with $17,000 electricity bills after the February freeze had only themselves to blame, because they didn’t “read the fine print.”
Funny, isn’t it, how politicians who denounce liberal elitists sneer when ordinary Americans get into trouble?
But something else struck me about Patrick’s take on supersize power bills: How did we become a country where families can face ruin unless they carefully study something as mundane, as normally routine, as their electricity contract?
And electricity isn’t a unique example.
Paul Krugman’s Newsletter: Get a better understanding of the economy — and an even deeper look at what’s on Paul’s mind.
As The Times’s Margot Sanger-Katz has documented, many people end up with heavy financial burdens because they chose the wrong health insurance plan — yet even experts have a very hard time figuring out which plan is best. Using an out-of-network health care provider can also lead to huge medical bills.
Wait, there’s more. One cause of the 2008 financial crisis was the proliferation of novel financial arrangements, like interest-only loans, that looked like good deals but exposed borrowers to huge risks.
What these stories have in common is that they’re snapshots of a country in which many of us are actually offered too many choices, in ways that can do a lot of harm.
It’s true that both Economics 101 and conservative ideology say that more choice is always a good thing. Milton Friedman’s famous and influential 1980 TV series extolling the wonders of capitalism was titled “Free to Choose.”
The spread of this ideology has turned America into a land where many aspects of life that used to be just part of the background now require potentially fateful decisions. You don’t get a company pension, you have to decide how to invest your 401(k). When you turn 65, you don’t just get put on Medicare, you also decide which of many Medicare Advantage plans to sign up for. You don’t just get power and phone service, you also have to choose from a wide variety of options.
Some, maybe even most, of this expansion of choice was good. I don’t miss the days when all home phones were owned by AT&T and customers weren’t allowed to substitute their own handsets.
But the argument that more choice is always good rests on the assumption that people have more or less unlimited capacity to do due diligence on every aspect of their lives — and the real world isn’t like that. People have children to raise, jobs to do, lives to live and limited ability to process information.
And in the real world, too much choice can be a big problem.
The lesson of subprime mortgages, health insurance and now Texas electricity is that sometimes people offered too much choice will make bigger mistakes than they imagined possible. But that’s not all. Too much choice creates space for predators who exploit our all-too-human limitations.
Before the subprime mortgage crisis, Edward Gramlich, a Federal Reserve official who warned in vain about the potential for disaster, asked, “Why are the most risky loan products sold to the least sophisticated borrowers?” The question, he suggested, “answers itself — the least sophisticated borrowers are probably duped into taking these products.”
Similarly, there’s clearly a lot of profiteering in medical billing, with the victims disproportionately those least able to understand what’s happening.
Beyond all that, I’d suggest that an excess of choice is taking a psychological toll on many Americans, even when they don’t end up experiencing disaster.
There’s a growing body of research suggesting that the costs of poverty go beyond the trouble low-income families have in affording necessities. The poor also face a heavy “cognitive burden” — the constant need to make difficult choices that the affluent don’t confront, like whether to buy food or pay the rent. Because people have limited “bandwidth” for processing complex issues, the financial burdens placed on the poor all too often degrade their ability to make good decisions on other issues, sometimes leading to self-destructive life choices.
What I’m suggesting is that a society that turns what should be routine concerns into make-or-break decisions — a society in which you can ruin your life by choosing the wrong electric company or health insurer — imposes poverty-like cognitive burdens even on the middle class.
And it’s all unnecessary. We’re a rich country — and citizens of other rich countries don’t worry about being bankrupted by medical expenses. It wouldn’t take much to protect Americans against being scammed by mortgage lenders or losing their life savings to fluctuations in the wholesale price of electricity.
So the next time some politician tries to sell a new policy — typically deregulation — by claiming that it will increase choice, be skeptical. Having more options isn’t automatically good, and in America we probably have more choices than we should.
Obamacare’s health plan choice benefits are vastly overrated
By Dr. Philip Caper, Special to the BDN • May 14, 2015
It is well documented that many other countries have created health care systems that are more popular than ours, cover everybody, are more effective as measured by better health outcomes, are better able to restrain increases in costs and, therefore, have per-capita costs that are a fraction of ours.
One of the reasons for the popularity of universal health care systems elsewhere in the developed world is that when everybody is in the same system, everybody has an incentive to make that program work. The people of those countries have a sense of ownership and responsibility for their common system.
That contrasts sharply with the situation here in the U.S., where people primarily and often exclusively are concerned with their own little piece of the system, such as Medicare, the Veterans Affairs, their own employment-based or veteran’s insurance, plans purchased on the Obamacare exchanges, Medicaid and so on.
Americans also are confused about who owns the system. Is it the government, their employer or their union? Or, as more Americans are coming to believe, health insurance companies, the pharmaceutical industry or the increasingly consolidated corporate providers of health care such as large hospital systems?
In other words, we lack the solidarity that both is an expression of and created by the existence of a single common way of dealing with the challenges of providing affordable health care coverage for all.
I’m a great fan of the goals of the Affordable Care Act — expanding coverage, restricting the most anti-social practices of health insurance companies and attempting to control overall costs. But I’m not a fan of how it tries to accomplish them.
Obamacare is based on the concept of choice among insurance plans. Such choice is greatly overrated.
In order to provide choice among insurance plans, something most people don’t care much about, we are losing choice among healers, something we care a lot about. We are discovering that choice of insurance plans comes at the cost of losing our choice of doctors and hospitals, as insurance companies vainly attempt to control their premium prices by restricting their networks of “providers.”
The financial price of giving people choice of insurance plans, the very reason for the existence of the problem-plagued health insurance exchanges, is very high. A recent Washington Post article documents the financial struggles of most of the state-run exchanges, struggles that are expected to last indefinitely.
There are other costs, as well. The complex nature of the health insurance “marketplaces” has created unnecessary anxiety and confusion among those using them. That in turn has spawned the creation of armies of consultants, “navigators” and other helpers to assist people in finding their way through the maze of choices created by the health insurance industry and exacerbated by Obamacare. This only adds to our national health care bill and does not buy one doctor visit, lab test, Band-Aid or aspirin.
Complexity is a huge drag on the popularity of our health care system as a whole. I have written before about the barriers to further reform of our health care system — fear, anger, ignorance, ideology, apathy and greed.
Apathy often characterizes people who already are well covered and don’t see any reason to worry about those who aren’t. They include the 55 million beneficiaries of Medicare and roughly 140 million covered by employment-related insurance who like it so much that they are frightened and angered by any program designed to expand coverage for others, fearful that it will reduce their own benefits.
Our obsession with “choice” among health plans not only is misplaced but economically costly and confusing and itself is a huge barrier to political solidarity. The infighting among groups covered by different plans is a powerful ally of those profiting from and wedded to the status quo. It is an important barrier to the one common sense idea most bolstered by evidence of fairness and of effectiveness — improved Medicare for all.
We urgently need fundamental reform of the way we finance health care in the U.S.
Fundamental change is extremely difficult in politics. But as the race to the bottom created by the folly of attempting to interject more choice and competition among insurance plans becomes clearer, the public becomes better informed about the alternatives and frustration grows, and people in Maine and elsewhere will come to demand it.
Editor's Note -
The preceding article on the topic of choice(that I think has been greatly over-rated) in health care was published as a column I wrote for the Bangor Daily News in May of 2015.
The following unpublished essay on the Illusion of Choice was written by me and Peter Arno in 2020.
- SPC
American Health Care – The Illusion of Choice
“Choice” is a major buzzword in current discussions of healthcare. So let’s discuss our actual healthcare choices—as individuals and as a nation, starting with the argument made by politicians, pundits, and media that over 160 million Americans love their health insurance and do not want this choice forcibly taken away by the likes of Bernie Sanders or Elizabeth Warren.
Americans under age 65 actually have very little choice in their medical care. Most have employer-sponsored coverage, but it’s important to realize that 66.1 million American workers lost or changed jobs in 2018, often accompanied by a loss or change in health insurance. Coverage also changed frequently for those remaining at the same job. In 2019, over half of all firms offering health benefits shopped for a new health plan, and nearly 20 percent of those actually changed carriers. The workers had no recourse, no choice when the new network chosen by their employer didn’t cover their personal doctors or favored hospitals.
Additionally, almost half (45 percent) of U.S. adults ages 19 to 64—or more than 88 million people—were inadequately insured over the last year (either they were uninsured, had a gap in coverage, or had insurance all year but their out-of-pocket costs were so high that they frequently did not receive the care they needed). What choices did they have to improve their care?
Our choices on the national level are between unsustainable increasing expenditures and skimpier coverage with more out-of-pocket costs. While we shell out more than twice as much per person on total healthcare spending and prescription drugs as people in other developed countries, we rank near the bottom on infant mortality, life expectancy, and preventable mortality.
The real elephant in the room here is the transformation of the American healthcare system’s core mission from the promotion of healing and the prevention, diagnosis, and treatment of illness to an approach dominated by large, publicly traded corporate entities dedicated to growing profitability and share price—in other words, the business of medicine. This commercialized, commodified and corporatized approach has failed. Costs have risen relentlessly, and the quality of and access to care for many Americans have deteriorated.
To reduce costs and have real choice, it is no exaggeration to say that the only option is publicly financed single-payer universal healthcare—Medicare for All. A public option, a Medicare option, Medicare buy-in, Medicare extra, or other half-measures will not succeed because the single largest source of savings in a single-payer framework is eliminating the bloated administrative costs generated by private insurers. And all “option” reform proposals leave thesewasteful and unnecessary costs mostly intact.
The second largest source of savings in a universal single-payer system comes through reducing prescription drug costs, using the powerful negotiating leverage of the federal government. The ability, will, and policy tools to restrain costs in a single-payer framework are the key to reining in the relentless rise in healthcare expenditures and to providing universal coverage.
Beyond choice, the major objection to a universal single-payer system is cost. Yet public financing for healthcare is not about raising new money, but about reducing total healthcare outlays and distributing payments more equitably. Nearly every credible study concludes—and 50 years of Medicare demonstrates— that a single-payer universal framework would be less costly than the status quo, more effective in restraining future cost increases, and more popular with the public. The fact that every other developed country in the world provides this kind of coverage makes it clear that the challenges of overhauling our healthcare system are not insurmountable.
The real struggle for a universal single payer system in the US is not technical or economic but almost entirely political. Retaining anything resembling the status quo is the least disruptive, and therefore politically easiest, route. Unfortunately, it is also the least effective route to attack the underlying pathology of the American healthcare system—corporatism run amok. Adopting the easiest route will do little more than kick the can down the road and will require repeatedly revisiting the deficiencies in our healthcare system until we get it right.
Peter S. Arno, PhD
Director, Health Policy Research Political Economy Research Institute University of Massachusetts, Amherst parno@peri.umass.edu
Philip Caper, MD
Founding Board Chair, Maine AllCare Brooklin, ME pcpcaper21@gmail.com
At Last, Democrats Get Chance to Engineer Obamacare 2.0
The Biden administration is trying to make the health care law more generous and closer to its original design, but may disappoint progressive allies hoping for more.
by Sarah Kliff and Margot Katz-Sanger NYT - February 27, 2021
Ever since the Affordable Care Act became law in 2010 — a big deal, in the (sanitized) words of Vice President Joseph R. Biden Jr. — Democrats have itched to fix its flaws.
But Republicans united against the law and, for the next decade, blocked nearly all efforts to buttress it or to make the kinds of technical corrections that are common in the years after a major piece of legislation.
Now the Biden administration and a Democratic Congress hope to engineer the first major repair job and expansion of the Affordable Care Act since its passage. They plan to refashion regulations and spend billions through the stimulus bill to make Obamacare simpler, more generous and closer to what many of its architects wanted in the first place.
“This is the biggest expansion that we’ve had since the A.C.A. was passed,” said Representative Frank Pallone of New Jersey, who helped draft the health law more than a decade ago and leads the House Energy and Commerce Committee. “It was envisioned that we’d do this periodically, but we didn’t think we’d have to wait so long.”
The Affordable Care Act has expanded coverage to more than 20 million Americans, cutting the uninsured rate to 10.9 percent in 2019 from 17.8 percent in 2010. It did so by expanding Medicaid to cover those with low incomes, and by subsidizing private insurance for people with higher earnings. But some families still find the coverage too expensive and its deductibles too high, particularly those who earn too much to qualify for help.
Tucked inside the stimulus bill that the House passed early on Saturday are a series of provisions to make the private plans more affordable, at least in the short term.
The legislation, largely modeled after a bill passed in the House last year, would make upper-middle-income Americans newly eligible for financial help to buy plans on the Obamacare marketplaces, and would increase the subsidies already going to lower-income enrollees. The changes would last two years, cover 1.3 million more Americans and cost about $34 billion, according to the Congressional Budget Office.
For certain Americans, the difference in premium prices would be substantial: The Congressional Budget Office estimates that a 64-year-old earning $58,000 would see monthly payments decline from $1,075 under current law to $412 with the new subsidies.
It was a blow to Obamacare’s authors when the Supreme Court allowed states to refuse to expand Medicaid, the health law’s primary tool for bringing comprehensive coverage to poor Americans. Multiple states have joined the expansion in recent years, some via ballot initiative, but some Republican governors have steadfastly rejected the program, resulting in two million uninsured Americans across 12 states.
The stimulus package aims to patch that hole by increasing financial incentives for states to join the program. Though Democrats are offering holdout states larger payments than they’ve contemplated in the past, it’s unclear whether it will be enough to lure state governments that have already left billions on the table. Under current law, the federal government covers 90 percent of new enrollees’ costs.
Republican critics of the law contend that Democrats are seeking to install long-sought permanent policies through a temporary stimulus plan.
“Suffice it to say, this is not Covid relief,” said Senator Bill Cassidy of Louisiana, who helped write a prominent Obamacare repeal bill in 2017. “It’s fulfilling the agenda of the Biden administration under the guise of Covid relief.”
Mr. Cassidy fears that short-term spending increases on Obamacare will prove difficult to undo. He cited a quotation from former President Ronald Reagan: “Nothing lasts longer than a temporary government program.”
The White House and the Department of Health and Human Services (H.H.S.) have already begun to advertise insurance options and make them easier to get. On Feb. 15, the Biden administration opened a special enrollment period so that uninsured people could sign up for coverage right away, publicizing it widely. Officials have also begun rolling back Trump-era work requirements in the Medicaid program.
Other regulatory changes are also planned. Xavier Becerra, Mr. Biden’s choice to lead H.H.S., testified about his ambitions on Capitol Hill this week. Officials are hoping to resolve the “family glitch” problem, which makes Obamacare insurance expensive for the children or spouses of workers who get insurance only for themselves at their job. Officials plan to tighten the rules for private short-term insurance plans that are not required to cover a full set of benefits. And they are considering a long list of technical changes aimed at making plans more comprehensive.
“Any one of these changes individually is moderate, but stack one on top of another and you get a big boost to the Affordable Care Act,” said Jonathan Cohn, author of “The Ten Year War,” a new history of the health law. “It doesn’t change the law’s structure, but it does make it much more generous.”
Those close to the effort say its ambitions — and its limits — reflect the preferences of those leading the way. Mr. Biden, who was involved in the passage and rollout of Obamacare as vice president, ran on the idea of expansion, not upheaval. And leaders in Congress who wrote Obamacare have been watching it in the wild for a decade, slowly developing legislation to address what they see as its gaps and shortcomings. Many see their work as a continuing, gradual process, in which lawmakers should make adjustments, assess their effects, and adjust again.
“When you think about where we thought the A.C.A. was headed four years ago, and contrast that to where we are right now, on the cusp of a massive expansion of affordability, it’s pretty exciting,” said Christen Linke Young, deputy director of the White House Domestic Policy Council for Health and Veterans Affairs.
But Bob Kocher, an economic adviser in the Obama administration who is now a partner at the venture capital firm Venrock, said that beyond the current changes, Mr. Biden’s mission on Obamacare seemed more modest, more like “don’t break it.”
“I don’t think he has any ambition in mind beyond managing it,” he said.
To aid in the effort, President Biden has recruited a host of former Obama administration aides. His picks for top jobs at the Centers for Medicare and Medicaid Services, the Office of Management and Budget, as well as key deputies at H.H.S., all worked on the first rounds of Obamacare policymaking. Many key congressional aides working on health care now also helped write the Affordable Care Act.
Born in the Great Recession, the Affordable Care Act was drafted with a focus on costs. Political compromises and concerns about runaway deficits kept the law’s overall 10-year price tag under $1 trillion, and included enough spending cuts and tax increases to pay for it. Those constraints led its architects to scale back the financial help for Americans buying their own coverage. Staffers who wrote the formulas said they ran hundreds of simulations to figure out how to cover the most people within their budget.
Those who wrote the regulations that interpreted the law also recall drafting rules that erred on the side of spending less to avoid blowback or litigation.
Republicans, who spent a decade dead set on repealing the law, blocked any policies to expand its reach. And the fiscal politics of the Obama years would have foreclosed the kind of subsidy expansion under discussion now, even if the law had been less politically divisive.
Now, with Democrats back in control of Congress and the White House, there is new enthusiasm for expanding health coverage. Against the background of the pandemic and changing views about federal debt among many economists, lawmakers are less concerned about deficit spending than they used to be.
But the Biden health project still faces challenges, and it may disappoint his allies. The new proposed spending, which would bring the law’s subsidies in line with early drafts of the Affordable Care Act, is temporary. Making those changes permanent could cost hundreds of billions over a decade, a sum that may spook moderate Democrats once the economy is in better health.
And for many Democrats, the overhauls do not go as far they had hoped. Mr. Biden ran not only on subsidy expansions and technical fixes, but also on a lowering of the Medicare eligibility age and the creation of a so called public-option plan, government insurance that people could choose in place of private coverage. Members of Congress have introduced Medicare expansion and public-option bills, but neither type of proposal appears likely to move soon.
Mr. Becerra has previously supported a single-payer system. He faced questions about his commitment to that idea from Senator Bernie Sanders, who has repeatedly introduced Medicare for All legislation, and from Republican senators who oppose the idea. In each case, he responded similarly: The Affordable Care Act is the president’s focus, and his own as well.
“I’m here at the pleasure of the president of the United States,” Mr. Becerra said. “He’s very clear where he is — he wants to build on the A.C.A. That will be my mission.”
Pramila Jayapal, a Democratic congresswoman from Washington State, who led a joint Biden-Sanders policy task force during Mr. Biden’s presidential campaign, says she is heartened by the measures the administration is taking — but concerned that the current efforts don’t yet match the promises made to progressives during the campaign. She said she would keep pushing for more generous health plans and an expansion of Medicare to cover more Americans, among other measures.
“I believe we’re going to do so many things in this package, and I do think it’s a good package,” she said. “But I believe we haven’t done enough to help everyone who has fallen into the cracks.”
https://www.nytimes.com/2021/02/27/upshot/biden-health-plan-obamacare.html?searchResultPosition=1
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