Minnesota Health Care- A Model For Other States?

I had the opportunity to provide testimony to the Minnesota Health Care Reform Task Force last week. This group was convened to develop new ideas and solutions to improve the health care in the state. Minnesota has always been looked upon as one of the “innovators” in the country when it comes to health care. It is the home of the Mayo Clinic, Medtronic, United Health Group, HealthPartners, Red Brick Health, and many other business model and product innovations that have been used as examples for other states in developing a more effective health care system for themselves.

The Task Force was certainly handed a huge task and must now integrate the federal requirements of the Affordable Care Act into its work. Despite the health care system that has developed in Minnesota over the years, it is still too expensive, too confusing, and many times inefficient.

The Task Force was provided updates from several of the work groups: Access (defining the benefit structures and pricing models to increase the number of individuals “covered” under a private or public health care financing program). Workforce (making certain the health care workforce is prepared to meet the future demand of health care). Health Insurance Exchange (developing the tools to implement a health insurance exchange market in Minnesota).

The four hour meeting was filled with handouts and presentations from the different groups. It was obvious to most that what was being discussed was going to cost a lot of money. It was also fairly obvious of the continuing confusion regarding the “rules” that must be followed to meet the requirements of the Affordable Care Act. Health care is complex- but these discussions made it even more confusing. There was very little (if any) discussion about how the average individual was going to understand any of it.

My testimony tried to at least bring the consumer/individual back into the discussion. I hope they were listening.

As I said, Minnesota is viewed as an innovator when it comes to health care. But Minnesota also struggles with the same challenges as other states to get consumers and individuals engaged and involved. With the complexity we are continuing to create- it’s no wonder.

Until groups like these begin to accept the economic realities we are facing, develop approaches based on a set of quantifiable objectives not utopian dreams, simplify the entire process, and include the perspectives of the “average citizen” in all of their discussions and decisions, we will probably just end up with a nice set of recommendations we can’t afford, that cost a lot of time and money to put together, and that we’ll just put on the shelf. We may move forward a little- but not nearly as far as we need to. But at least we're doing something.

The Supreme Court Decision and GSK; Which Way Will We Go?

It was fun to watch the cable news channels trip over themselves as they initially incorrectly reported the outcome of the Supreme Court decision last week. In their quest to report first- they reported wrong. Such is the price we have to pay when we want the news instantaneously. We’re going to need to be even more cautious when we’re determining what to believe; especially when it comes to deciding what to believe about health care.


Since the decision was made- the pundits have been trying to figure out what it really means. For all practical purposes, the guts of the law were upheld. It’s just that what things are called, and how things will work are going to change pretty substantially.

Even with the decision finally made, the health care debate is going to continue. The country is still divided on it view of the law. But the intensity of the division has intensified. The rhetoric behind the discussion will get even uglier than before. Just like we should have learned as the cable channels first reported the decision, what is reported will not necessarily be the truth.

The fundamental question we will continue to grapple with is this: how much should the government organize the health care mess we have created this country versus how much can we really rely on the “free market” in its ability to fix it.

Today, pharmaceutical company GlaxoSmithKline (GSK) agreed to a $3 billion settlement essentially resulting from health care fraud. The company was selling pharmaceuticals to markets where the drugs were not intended, and for conditions that had not been tested. The general public was exposed to some very substantial risks. But the GSK sales folks, some physicians, and others made a lot of money in the process; just following the American Dream. The GSK annual report states the ultimate aim of GSK’s business strategy is “to deliver sustainable improved long-term value and returns to shareholders.” There is no mention of delivering quality products at an affordable price to their customers. These companies are big, and the focus is financial. In an article about the fraud for Forbes Mathew Harper writes, “Criminal fines for giant drug companies, no matter how big, are less a deterrent than a cost of doing business.”

The free market left on its own can be dangerous.

So, we are still left to decide between a bloated and expensive health care law generally administered by the federal government that few understand and many people still don’t like, and uncertainty as to whether it will work, and a free market approach that continuously struggles to put the patient, the individual, ahead of profits.

I’ve said all along the answer is somewhere in-between. We just don’t have the right leaders in place to put a middle-ground approach together. The debate will continue.

Do Health Plans Have A Heart After All?

United Healthcare, Aetna, and Humana all stated they would continue with some of the provisions required in the Affordable Care Act regardless of what the Supreme Court decides about the constitutionality of the law itself. United Healthcare specifically said they would continue to allow children to stay on their parent’s plans until the age of 26, eliminate all lifetime limits for health care expenses, streamline appeals and complaints, and not allow the cancellation of health insurance after-the-fact (rescissions).

United Healthcare CEO Stephen Hemsley said in a statement, “The protections we are voluntarily extending are good for people’s health, promote broader access to quality care, and contribute to helping control rising health care costs.”

Do health insurance companies have a heart after all?

Make no mistake, they are making these decisions for business reasons not for the general welfare of the population. If the Supreme Court strikes down the law (or portions of it) taking these provisions away would be a public relations nightmare. Health plans don’t need any more negative p.r. And don’t think paying for them will be free- we will all be paying the cost.

While this is a smart business strategy I am left to wonder. If these protections are good for people’s health, promotes broader access to quality care, and contributes to helping control rising health care costs, why weren’t they providing them before?

Maybe the “free market” needs some help and guidance after all.

Creating More Informed Health Care Citizens

                                                         We’re waiting to hear the outcome of the Supreme Court's decision about the Affordable Care Act. We should get the word before June 28. The odds are (from what I’ve heard and read) the most contentious part of the legislation (the requirement for everyone to have health insurance) will be declared unconstitutional by a 5-4 vote. Nobody really knows, but that seems to be the scuttlebutt. The question we are then going to face is if that part of the law goes away, how will the rest of the law work? Or will it at all? And if Romney wins in November and succeeds in repealing the entire law (a campaign promise), will all of this be for naught? Nobody said changing the way health care works was going to be easy. But it has to be done.

Americans are going to need to understand that the status quo is not an option. The way our health care system works needs to change. It’s simply too expensive. It is going to need to be different than it has been in the past no matter what approach is used to try to fix it. Individuals are going to need to step up to the plate more than they ever have before and be informed, take responsibility, and participate. They are going to need a basic understanding of reality instead of relying on their emotions to form opinions and make decisions.

Many states (Minnesota included) are already trying new approaches without federal involvement. While some states may be taking some action, others don’t have the funds, the will, or the expertise to take on the challenge. This is a national issue that needs everyone involved. The key to success in any effort is to get individuals engaged to become part of the solution- not be part of the problem.

The Citizens League and Bush Foundation are holding a series of “conversations about health care” across Minnesota to receive citizen input about their perspectives of what needs to be done to address the health care challenges we face. The information they gather will be used to help state policy-makers make decisions about health care in the state. I took my US Health Systems class to one of the events. I was once again amazed with the lack of understanding of the general public as to what is really going on. (You can link to the Bush Foundation blog post I was asked to write by clicking here).

We need to teach and train the general public better about health care better than we have. The logic and details of the Affordable Care Act were communicated poorly and have since been buried in politics. The system we have created is complex and confusing- but can be explained. The health care system itself has tried some education efforts but has a trust issue with the general population. So the problem of a relatively uninformed general public remains.

If we can create a better informed public by teaching the facts, the options, and the roles they will need to play discussion just might be more productive. Until then, we’re simply going to continue to tread water. You can only tread water for so long before you sink. I hope we don’t get to that point, but you never know.

When Employer Behaviors Change

The House Ways and Means Committee released a new report that has received some media time over the past few days. The report, “Broken Promise: Why Obamacare Will Force Americans to Lose the Health Care Coverage They Have and Like” provides a summary of the results of a Fortune 100 survey concluding many employers will simply drop their employer sponsored insurance (ESI) because of the way the rules and fines established by the Affordable Care Act and move their employees to the Health Insurance Exchanges to purchase their coverage. Paying the fine imposed in the Affordable Care Act is cheaper than providing coverage.

The report states the Affordable Care Act “threatens the stability and sustainability of the employer-based health insurance system.” As if it is stable and sustainable today.

The report estimates employers will save nearly $29 billion in 2014 alone and over $422 billion between 2014 and 2023 using the fine-paying approach. Sounds to me like those savings could be a great boost to the economy, to the global competitiveness of employers, and in creating jobs. The report doesn’t talk about that because it is intended to deliver a different message.

The report should probably have an addition to the title to really clarify what we’re dealing with for the general public; “Broken Promise: Why Obamacare Will Force Americans to Lose the Health Care Coverage They Have and Like--- But Won’t Be Able To Afford for Much Longer.”

Anybody who might have thought “nothing will change” for the employees with any health reform model (Republican or Democrat) was simply naïve. “Nothing will change” is the politically correct way to talk in an election season- hopefully, the American people know better.

Things are already changing and they have to keep changing if we’re going to head off the real health care cost crisis before it actually happens. The sooner the politicians and the media can start to talk straight with the American people, the sooner they will get on board and help to become part of the solution.

The information and subject of this report is important. Employers are going to change their behaviors when the incentives of the game are changed. When employers change their behaviors, things are going to change for the employees. It’s not complicated. What is complicated is coming up with alternative solutions to address the changing behaviors and at least help the employees plan for what may be coming down the road. Unfortunately, this report didn’t get that far. And, probably didn’t try.

Health Care and the Supreme Court:: All Bets Are Off

Before the Supreme Court arguments began I was pretty confident they would rule as follows: The Anti-Injunction Act wouldn’t apply (they would move forward on the other items), they would narrowly determine the individual mandate to be Constitutional (requiring everyone to have some type of protection for health care costs), the Severability provisions wouldn’t apply (since the individual mandate would remain in place), and the expansion of Medicaid would move forward (since states aren’t necessarily “forced” to participate in Medicaid in the first place). After this week, I could be wrong on three out of four.

While oral arguments are seldom indicative of what the final results will be in a Supreme Court decision, the picture that emerged last week was less than optimistic for the Affordable Care Act. All Justices seemed to indicate the Anti-Injunction Act does not apply so there was little disagreement between the sides. However, the government simply could not defend its position for requiring the purchase of health insurance for everyone, why the rest of the law should remain in-force even if the mandate was repealed, and why the Medicaid expansion is not a “coercion of federal power.” At times, listening to the government blurt its incoherent responses to questions was painful.

If the Affordable Care Act is thrown out in its entirety, we will once again be starting over with health care and it’s not going to be any easier the next time around.

Republicans will continue to push to rely on the free-market which simply will not work in health care today. Democrats will move to a single-payer argument which will not be accepted by most of the population. We will once again be at a stalemate. In the meantime, individuals and families will continue to struggle with the system we have patched together and be destroyed by its rules and its costs. We have lost precious time and millions of dollars fighting this fight.

Hopefully, the Supreme Court will come to a legal and yet rational decision. If the individual mandate is ruled unconstitutional, let’s hope they keep some of the provisions in the Affordable Care Act that make sense and let Congress piece together a plan that can work- by fixing the delivery of health care first- and then worry about getting everyone in the game.

It’s what they should have done from the beginning.

Buying Health Insurance Is Going To Change

The Congressional Budget Office released an update of their thoughts on the impact the Affordable Care Act might have on the way health insurance is delivered in America. The numbers are a little different than what they thought back in 2010 when the Act was signed into law.

In their report (you can get it off the CHCI web site by clicking here); "Estimates of the Effects of the Affordable Care Act on the Number of People Obtaining Employment-Based Health Insurance," the CBO attempts to determine the impact all of the new rules of the ACA will have on the different “systems” we have (and will continue to have) to pay for health care in this country. This includes trying to estimate how many individuals will continue to obtain health insurance from their employer; how many will go to the health insurance exchanges, and how many will gravitate to an expanded Medicaid program. In 2010 the CBO thought 8-9 million individuals would lose their health insurance from their employer (primarily small employers) and either purchase health insurance through the health insurance exchange or Medicaid or remain uninsured and pay the penalty. The new number is 11 million.

CBO spent quite a bit of time in this report explaining all the reasons making any projections are so difficult. Behavioral economics plays a large role in what will happen, but, as illustrated by behavioral economist Dan Ariely, we are all “predictably irrational.” We have no idea how all of this is going to change the mix.

Regardless of what the number is, the health insurance market is about to go through a huge shake-up. While today's discussion continues to focus on purchasing “health insurance,” the real discussion should be centered on how we will individually finance the health care services we will inevitably use. An even bigger issue will ultimately be the training and educating of the 11 million (or whatever number it ends up being) individuals who will leave the world of employer-based health insurance to begin making these decisions on their own.

The CBO still has no idea of what will actually happen when/if the ACA moves forward. Suffice it to say the world of health care will continue to change in dramatic ways. The individual and their families are going to need to be engaged whether they want to or not.