“Three R’s” Against ObamaCare

My colleague Jeff Anderson has coined a winning slogan for the continuing struggle against ObamaCare: “Repeal and replace.”

But there’s another “R”: Resist!

Anticipating repeal, governors have significant opportunities to put sand in the gears of ObamaCare. Two have recently taken exemplary action:

• Nebraska Governor Heineman has told his state’s education establishment (i.e. teachers’ union bosses) that the costs of ObamaCare will hit their budgets, because the state will have to raid education funding to pay the price of ObamaCare.  It’s a great way to fragment the big-government coalition that rammed ObamaCare through, and is desperate to block repeal.
• Minnesota Governor Pawlenty has signed an executive order forbidding his bureaucrats from applying for federal grants to set up a state-based “exchange” which would limit people’s choice of health insurance under ObamaCare.  It’s important not to establish a new politically appointed bureaucracy dedicated to implementing a law that is going to be repealed before January 2014, when the exchanges are supposed to dictate what health insurance people can have.

Every governor should look to resist using these and other tactics.  In California, the pro-single-payer legislature has sent Governor Schwarzenegger a bill to set up an exchange that would likely be the most restrictive in the country.   Signing it would create a terrible legacy, and complicate his successor’s ability to resist ObamaCare.

Collective Bargaining Moves to the Legislature

The Minneapolis-St. Paul metropolitan area recently faced the threat of a nurse’s strike, but the nurses and hospitals came to an agreement. One result, though, may be that nurses seek to further bring the political world into the world of health care.

Phil Krinkie, head of the Taxpayers League of Minnesota, comments:

At the conclusion of the contract dispute between the nurses and the 14 Twin City hospitals involved, the nurses union said they’d seek legislation to place into law nurse staffing ratios. In other words, what they were unable to accomplish through the collective bargaining process they will now try to achieve by applying political pressure.

This has become an all-too-frequent strategy for many groups: What they can’t get at the negotiating table, they take to the halls of the Capitol.

Is the Legislature the proper venue for labor disputes? Don’t we already have an over-abundance of workplace mandates?

Apparently not, if ObamaCare is any indication.

Medical-Tort Law: Ranking the States

How much do a state’s laws governing medical malpractice and other torts relevant to health care affect the availability of care?  Plenty!

Lawrence J. McQuillan’s & Hovannes Abramyan’s 2010 edition of the U.S. Tort Liability Index, which has a number of measurements included in the U.S. Index of Health Ownership, ranks states according to 42 variables.

Eight of the measurements in the U.S. Tort Liability Index are relevant to the U.S Index of Health Ownership: One output and seven inputs. The previous edition of the U.S Index of Health Ownership included six measurements of medical tort, but McQuillan & Abramyan have discovered more variables for their 2010 edition of the Tort Liability Index, allowing more detailed measurement.

As a partial update of the U.S. Index of Health Ownership, this brief analysis calculates a medical-tort index from a simple average of the eight relevant variables.  Mississippi, Nevada, Michigan, Colorado, and Louisiana lead the pack; while Vermont, Rhode Island, Kentucky, Pennsylvania, and Iowa bring up the rear. Even the leaders, however, lag in some measurements.

Mississippi, for example, leads on procedural rules: Pre-trial screening or arbitration and conditions on the use of expert witnesses. However, it does not limit lawyers’ ability to abuse their privilege by limiting their share of awards. Colorado and Louisiana also fail to impose limits. Unfortunately, the laggards do not show a similar pattern: The bottom five states perform poorly in all eight measurements.

Reducing the burden of medical tort is critical to increasing Americans’ health ownership and reducing medical costs that curtail our access to care. Some progress is evident, but states aiming to improve their medical-tort laws still have a long way to go.

Minnesota Gubernatorial Candidate: Don’t Buy into Early Medicaid

Minnesota State Rep. Tom Emmer, a Republican candidate for governor to fill the office of Gov. Tim Pawlenty (who is not running for re-election) offers three reasons why Minnesota should not be eager to accept “free” money to expand Medicaid.

Modern Health Care at Odds with Freedom and Privacy

The Minneapolis Star-Tribune runs a profile of Twila Brase, president of the Citizens’ Council on Health Care. It contains this line:  ”Brase opposes anything she thinks constricts individual freedom or invades privacy. That puts her at odds with many of the most popular concepts in modern health care: evidence-based medicine, electronic medical records, DNA databanks, doctor quality ratings.”

Come to think of, that’s not a bad way of describing “popular concepts in modern health care,” if by popular we mean “popular with the political class.”

Getting a Diagnosis Online

From the Star-Tribune of Minneapolis come news of Zipnosis, a company that will write a prescription for you if you have minor health issues. The Star-Tribune opens its story by talking about a woman, suffering from seasonal allergies, who “simply charged $25 to her credit card and spent a few minutes answering an online survey at Zipnosis.com. Hours later, she received a diagnosis electronically and picked up antibiotics at her pharmacy, without ever talking to the clinician in person or on the phone.” While the company operates only in Minnesota, it hopes to expand to 15 states next year.

Who is most likely to benefit from such a service? “One of the company’s target groups is young adults ages 18 to 35, who often are not insured, don’t get sick often and are looking for ways to save money.”

Sounds great if you’ve got a known health condition and need a new prescription. But I wonder how long it will take for the regulatory state to strike down this modest advancement in consumer freedom? For in this same story, I read this: “But there are skeptics. Some local doctors say they wouldn’t recommend Zipnosis to their patients for fear of misdiagnosis.”

Some doctors will resent the fact that they may lose business for simple transactions, and government regulators are prone to, well, regulate.

Minnesota’s new program for the poor to test out global payment to hospitals

John LaPlante’s recent post highlights the difficult shift underway for a Minnesota health care program for the very poor.  I thought that I might add a few more details as I’ve made efforts to help this process along.

Minnesota is one of the few states that offered a purely state-funded health care program for poor adults without children.  The program is called General Assistance Medical Care (GAMC).  For those under 75 percent of federal poverty guidelines, it operates much like a  Medicaid managed care program, but with slightly less generous benefits. 

In recent years, the program’s cost escalated substantially and there was criticism that it was not meeting the unique needs of such a poor population.  In early 2009, due to these problems and the state’s severe budget shortfall, Governor Pawlenty proposed to reform GAMC by creating an uncompensated care pool, encouraging clinic use over emergency rooms, and adding care coordination.  The proposal fell on deaf ears at the legislature.  Ignored by the legislature, Pawlenty vetoed the program at the end of the legislative session and called on lawmakers to propose alternatives.  Importantly, the veto gave the program time to continue while alternatives were being considered.

As lawmakers entered the 2010 session, there was still no deal on GAMC.  I supported reinstating an alternative, but I was discouraged by the fact that the leading alternative essentially reinstated the old program with severe cuts to provider payments.  This alternative was appropriately vetoed by the governor.

Following the veto, a bipartisan effort moved forward to actually bring real change to the program.  This resulted in a compromise that Pawlenty signed.  At the time, it was hailed as a powerful example of how politicians from across the aisle can still work together.

The centerpiece of the GAMC compromise was a fundamental change in how safety net hospitals get paid.  Instead of being paid a fee for each service by the state or a managed care health plan, hospitals would be paid one global payment for the entire GAMC population they served.  In theory, the global payment would create an incentive for hospitals to develop a more comprehensive and coordinated approach to serving the GAMC population.  Under a global payment, the hospital would retain any savings that resulted from steering enrollees away from expensive emergency rooms toward less costly and more appropriate care. 

With the passage of federal health care legislation, Democrats in the legislature attempted to abandon the GAMC compromise and proposed to implement an early expansion of Medicaid for those under 75% of FPG.  They proposed to pay for the expansion by increasing Medicaid surcharges on hopsitals, HMOs, and facilities for the disable.  This became a central issue in the final days of Minnesota’s legislative session that ended on Monday.  (My comments on this issue can be read here.)   In the end, the governor successfully negotiated a budget deal that did not expand Medicaid or increase surcharges.  Consequently, the GAMC compromise remains and hospitals (and others) are busy figuring out how the new GAMC program will work.

I believe that a global payment may be the right approach for this unique population and am eager to see how this will all work in practice.  Unfortunately, the new payment approach is also severely underfunded, which almost sunk the program before it even started.  As of a couple weeks ago, only one hospital had signed up for it.  Today, four hospitals representing a majority of the GAMC population are now on board. 

While a global payment may be right in this situation, it’s important to note that the benefits of a global payment may be uniquely limited to this population.   On top of being desperately poor, most of the GAMC population are either chemically dependent or mentally ill.  Many are homeless.  Few have adequate transportation.  As a result, many if not most are ill-equipped to navigate the health care system on their own.  A global payment creates both the incentive and the flexibility to develop a program that reaches out to this population as opposed to waiting for them to show up at the emergency rooms.  It’s far better that hospitals create the program than government bureaucrats.

For the rest of us, a global payment risks turning hospitals and health care systems into risk-bearing managed care plans that are primarily interested in population health versus each individual’s personal health.

Getting back to the GAMC population, there certainly remains a serious concern that hospitals will now have an incentive to establish mechanisms to avoid the costlier GAMC enrollees.   The program will require careful scrutiny.

Uncertainty Clouds Minnesota Program for the Poor

The U.S. Government is not the only government that has created confusion over health care. In Minnesota, a new agreement on a health-welfare program funded with state money has some people uncertain over what happens next. As the Star-Tribune of Minneapolis says:

Even as legislators ended a grueling session Monday with a compromise over a contentious health care bill, the state began mailing letters telling 39,000 very poor, childless Minnesotans that their health coverage will change on June 1.

Problem is, nobody knows precisely how it will change — not doctors, not hospitals where care now will be centered, not legislators or Gov. Tim Pawlenty, who together struck the late-night deal.

They’re talking about General Assistance Medical Care (GAMC), which, as a state program. GAMC has many faults, but because it’s funded without federal funds, the state can modify or eliminate it without the permission of the U.S. government. And the problems it has won’t be imposed on the rest of the country–another difference  from a national program.

The Hidden Costs of Government Health Programs

Peter Nelson, an occasional contributor to State House Call, wrote an excellent commentary on some of the effects of government health care programs. Though his piece is Minnesota-centric, the lessons apply elsewhere.

Here are a few of the key points:

“Reducing the rates that public health programs pay to providers is an improper and arguably fraudulent technique to reduce government spending. ” In short, it understates the costs of health programs by hiding some of them through cost-shifting to people who pay for their own health care.

“The increased Medicaid surcharge on health care providers amounts to an unnecessary and unfair tax increase.” Minnesota, like most states, plays the Medicaid shell game with the U.S. government: It imposes a tax on hospitals so that it can receive federal matching funds. But the funds are not “free.”

“The health and human services budget is tasked with too much of the budget-balancing burden.” Like most states, Minnesota has a serious budget deficit, both for the fiscal year that is ending in June and the one that starts in July. Public schools have been relatively exempt from any budget cuts.

Students Rips ObamaCare

A small group of homeschool students in Minnesota have called on state leaders to file suit against the national government over ObamaCare. Not newsworthy? I expect that any day now we will see reports about how children in a school somewhere have given their overwhelming approval. (See! The new health care law is SO popular that even children know about it!)

It would be fitting. After all, the notion that government can buy health care for everyone and save money in the process shows a child-like ignorance of economics.

Scratch that. I bet those homeschooled kids DO know economics, which is one reason they think the way they do.