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Another lawsuit against ACA

by jerry on April 04, 2021

The Affordable Care Act, passed in 2010, has attracted the attention of several lawsuits. The Supreme Court has yet to release a decision for a case that it heard (California vs. Texas), and Kaiser Health News reported on yet another lawsuit that received clearance for the lawsuit to proceed. This lawsuit attacks the requirement that preventive services must be free. While requiring that preventive services must be free might be good policy (I am unaware how strongly the evidence supports or undermines that), the case raises some constitutional questions, including one regarding whether officials who are neither appointed by the president nor confirmed by the Senate are authorized by the constitution to make binding regulatory decisions.

The Affordable Care Act, passed in 2010, has attracted the attention of several lawsuits. The Supreme Court has yet to release a decision for a case that it heard (California vs. Texas), and Kaiser Health News reported on yet another lawsuit that received clearance for the lawsuit to proceed. This lawsuit attacks the requirement that preventive services must be free. While requiring that preventive services must be free might be good policy (I am unaware how strongly the evidence supports or undermines that), the case raises some constitutional questions, including one regarding whether officials who are neither appointed by the president nor confirmed by the Senate are authorized by the constitution to make binding regulatory decisions.

This current lawsuit attacks specific provisions of the ACA, while the Supreme Court is expected to rule on the constitutionality of the entire legislation after the individual mandate was revoked. After seeing these many attacks on the ACA (whether in rhetoric or via lawsuits), it would be nice to see opponents spell out what they think would be a better plan and understand what advantages such plans would offer.

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Surprise facility fee

by jerry on March 28, 2021

NPR published a look at one patient's surprise at being billed a facility fee that cost about ten times as much as the actual treatment. Hospitals have argued that they should be able to charge more for the same procedure performed in their facilities rather than in a clinic because they have to provide the ability to handle complications, even if those complications do not arise. On some level, the argument makes sense for some potentially risky procedures. For routine procedures (and I suspect that the steroid injection listed in the story would count as one), this argument seems to fall flat. In particular, hospitals get paid a fee for providing emergency services, and if those prices do not cover operations, perhaps those fees should be adjusted. Regardless, from a societal perspective -- and especially from the perspective of an individual patient -- it does not make sense that a simple, routine, and relatively safe procedure should cost the patient ten times as much as it did when not much else has meaningfully changed.

NPR published a look at one patient's surprise at being billed a facility fee that cost about ten times as much as the actual treatment. Hospitals have argued that they should be able to charge more for the same procedure performed in their facilities rather than in a clinic because they have to provide the ability to handle complications, even if those complications do not arise. On some level, the argument makes sense for some potentially risky procedures. For routine procedures (and I suspect that the steroid injection listed in the story would count as one), this argument seems to fall flat. In particular, hospitals get paid a fee for providing emergency services, and if those prices do not cover operations, perhaps those fees should be adjusted. Regardless, from a societal perspective -- and especially from the perspective of an individual patient -- it does not make sense that a simple, routine, and relatively safe procedure should cost the patient ten times as much as it did when not much else has meaningfully changed.

The current model gives hospitals a strong incentive to acquire physician practices and tack on a facility fee in order to boost revenue. Those acquisitions make independent doctor practices less and less common, driving up the overall price of health care. Fortunately, the Centers for Medicare & Medicaid Services has tried to stop this practice, but the story points out that the American Hospital Association has sued to have this practice continue.

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California governor selects insurer for vaccine distribution

by jerry on March 21, 2021

Kaiser Health News published an article noting that the governor of California awarded a no-bid contract to Blue Shield and recounting a number of donations that the insurer has given to the governor's campaigns. While the contract is only $15 million (the insurer had $21 billion in revenue in 2019), the contract represents a marketing opportunity that could be valuable for the company.

Kaiser Health News published an article noting that the governor of California awarded a no-bid contract to Blue Shield and recounting a number of donations that the insurer has given to the governor's campaigns. While the contract is only $15 million (the insurer had $21 billion in revenue in 2019), the contract represents a marketing opportunity that could be valuable for the company.

With only a quick review, the optics do not look good: Blue Shield has a history of donating to the governor's campaigns (including some special interests). Vaccines are generally administered through providers, although one can imagine that having a strong retail presence (like drug stores) could be very helpful. Blue Shield, a health insurer, controls neither a provider network nor a strong retail presence. What the insurer does have is a history of financial contributions.

The optics would look much better if the contract had a bidding process. What the administrator would likely reasonably respond with is that the current circumstances call for speed and agility, not for perfection. While that might be true, it seems that the state could have put forth a bidding process with an accelerated review schedule.

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A critique of the Affordable Care Act

by jerry on March 14, 2021

The Galen Institute -- a healthcare free-market "public policy research organization" -- published a study that critiqued the Affordable Care Act (ACA) premium subsidies included in the most recent COVID relief legislation. Among other issues, the author criticizes the legislation for benefiting some higher-income workers more than some lower-income workers. It's possible that there are some nuances about how insurance subsidies work that are not covered, or that legislators simply did not have enough time to work out details. What was interesting was the author's more general critique of ACA: that the CBO estimated that 25 million people would enroll in the health insurance exchanges, but that number is closer to 10 million in reality. ("Annualized exchange enrollment in 2019 was 10 million -- 15 million people below CBO's projections of 25 million exchange enrollees in 2019.") Additionally, the author claims that while 2 million of those 10 million enrollees are enrollees in a private health plan (e.g. non-Medicaid), the number of employees covered by employer-sponsored dropped by the same number, meaning that most of the gains in covered lives came through Medicaid expansion.

The Galen Institute -- a healthcare free-market "public policy research organization" -- published a study that critiqued the Affordable Care Act (ACA) premium subsidies included in the most recent COVID relief legislation. Among other issues, the author criticizes the legislation for benefiting some higher-income workers more than some lower-income workers. It's possible that there are some nuances about how insurance subsidies work that are not covered, or that legislators simply did not have enough time to work out details. What was interesting was the author's more general critique of ACA: that the CBO estimated that 25 million people would enroll in the health insurance exchanges, but that number is closer to 10 million in reality. ("Annualized exchange enrollment in 2019 was 10 million -- 15 million people below CBO's projections of 25 million exchange enrollees in 2019.") Additionally, the author claims that while 2 million of those 10 million enrollees are enrollees in a private health plan (e.g. non-Medicaid), the number of employees covered by employer-sponsored dropped by the same number, meaning that most of the gains in covered lives came through Medicaid expansion.

The author also pointed out that tax payers are subsidizing insurance premiums by about $50 billion per year and that individual market premiums doubled between 2013 and 2017. All of these statistics point to a less rosy picture of ACA's success -- it would be interesting to read an ACA's proponent's scholarly take on all of this.

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Hospital accused of altering health records to avoid culpability

by jerry on March 07, 2021

NBC News published an alarming article detailing patient accusations of a hospital misdiagnosing and then altering the patient's medical record to avoid guilt. If true, the allegations are quite concerning. From what has been pieced together, the hospital originally declared the patient to be free of cancer, but that diagnosis was apparently the result of a technician accidentally selecting the wrong value from a dropdown menu despite leaving a contradictory textual comment. When the patient eventually learned from a second opinion that she had cancer, she was diagnosed with stage 4 and advised that she might have less than a year to live. One might be skeptical of a single patient's accusations, and I was surprised to learn that a forensics firm worked on about 500 medical malpractice cases and found "significant alterations to the patient's record that favored the hospital in 85 percent of them."

NBC News published an alarming article detailing patient accusations of a hospital misdiagnosing and then altering the patient's medical record to avoid guilt. If true, the allegations are quite concerning. From what has been pieced together, the hospital originally declared the patient to be free of cancer, but that diagnosis was apparently the result of a technician accidentally selecting the wrong value from a dropdown menu despite leaving a contradictory textual comment. When the patient eventually learned from a second opinion that she had cancer, she was diagnosed with stage 4 and advised that she might have less than a year to live. One might be skeptical of a single patient's accusations, and I was surprised to learn that a forensics firm worked on about 500 medical malpractice cases and found "significant alterations to the patient's record that favored the hospital in 85 percent of them."

Putting aside the shocking cover-up (if true), this case highlights that both the patient and the hospital might have been better off if the patient had full access to her medical records in this case. Many medical providers have been reluctant to fully share patient medical records, for fear of misinterpretation, additional questions, or perhaps mistakes that might be uncovered by patients. However, increasing reliance on software might make it easier for mistakes to slip by (whereas in older times, perhaps the referring doctor would have seen the textual comment). Electronic health records bring many benefits over paper records, but they are still vulnerable -- and perhaps especially so -- to bad input. Allowing patients to have full and easy access to their own medical records could be an important tool in catching mistakes early.

Additionally, watching hospitals complain about the cost and complexity of accessing the audit log is concerning. If the number of accusations of cover-ups rises significantly, the medical industry would ideally have an incentive to have an easier time to access and interpret the audit log rather than use it as a smokescreen to deny wrongdoing.

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