Author: Ann Marie Marciarille

A headline announcing that CalPERS plans an 85% rate hike for long-term-care insurance would be hard to miss.  If you did miss it, you may see it here: http://articles.latimes.com/2013/feb/21/business/la-fi-calpers-longterm-care-20130222.  I missed it until a friend brought it to my attention.  In an era of double digit health insurance premium increases, a number like 85% still has the power to shock.

What's the story?  First, the premium hikes are  not scheduled to take effect until 2015.  Second, they target perhaps 110,000 people who purchased CalPERS LTC insurance in its early days, from 1995-2004. Third, these 110,000 people purchased lifetime policies.

If LTC insurance is the most difficult to price, lifetime LTC insurance is the king of kings.  Forecasting twenty years into the future on the likely longevity of a population living ever longer into age and disability is, it turns out, very difficult. The same article reports that stroke and dementia have been the leading causes of claims, accounting for 44% of all payouts.

Dementia, in particular, can be hard to track on a disease path. Whether it is because we diagnose dementia earlier or because dementia is more prevalent in an increasingly aging population or even — because of the confluence of these two trends — we live ever longer under the diagnosis of dementia. We are awash in seniors with a dementia diagnosis and in need of long-term care in a variety of settings. Add to this that older women — caregivers of us all– are the most likely sub-population to be diagnosed with dementia and you will understand why the CalPERS spokesperson in the article more or less concedes that the take up rate for this insurance was too high for its business model and the renewal rate for this insurance was too high for its business model. That is how you get to an 85% premium hike.

My students are often astonished to learn that LTC insurance is considered part of health insurance in some other countries.  Seen from a different angle, of course it is beyond strange to realize that we segregate the care of those most likely to need long term care insurance into a distinct product marketed only to older people and likely to appeal only to the old and the farsighted near old. By farsighted I mean those who recall that — so far — everyone dies and that the more common path to death in modern America is one of slow decline from chronic illness and not sudden death.

All of this is playing out in front of a larger scenario where LTC insurance is cast as an optional health care benefit. Perhaps this is because an estimated 90% of all long term care is family-provided and overwhelmingly the work of women.

When I think about LTC insurance market failures I think about younger and middle aged woman stretched to the limit taking care of older women.  If there ever were a recipe for invisibility in public policy circles, this would be it.

But why 85% at once as a premium hike?  I wonder if it correlates with the demise of the ACA's CLASS Act.  Now that the government will not ramp up a LTC insurance program fueled by payroll-deduction designed default enrollment of every age and demographic group, LTC insurance is back as a product for the well off.  The vast majority of Americans could not afford these CalPERS premiums. Anyway, we Americans mistakenly believe Medicare offers LTC coverage.  It is, of course, Medicaid that offers LTC coverage but only at the cost of considerable impoverishment.

And the shibboleth that huge numbers of American seniors voluntarily impoverish themselves to supp at the banquet of Medicaid-funded nursing home care is just that.  It is statistically inaccurate, yet evocative to consider that more attention is spent advancing this scenario than in considering that nursing home occupancy rates are down. Elders are voting with their feet, sometimes at terrible risk to themselves and often at terrible risk to the health and finances of their senior themselves family caregivers.

Who — as one of my friends aasks — could possibly believe that gaming the system to obtain a Medicaid funded nursing home bed was some kind of victory?  Could such a theorist ever actually have visited a nursing home that accepts Medicaid reimbursement? 

 

I tell my health law students that the role of self-insurance in employer-sponsored health insurance is a riddle wrapped in a mystery inside an enigma.  By this, I mean that the explosive growth in self-insurance by employer sponsored health insurance plans is an under-discussed phenomenon.

Today, the New York Times took it on.

First, the NYT explains that an estimated 59% of private sector workers with health coverage are enrolled in self-insured plans (up from 41% in 1998).  Always popular with the very largest employers, the growth of self-insurance for small to mid-size employers is tremendously important for those trying to understand the role of state health insurance regulation. Self-insured plans, in short, are exempt from much state health insurance regulation.

Second, explaining that the exemption of self-insured plan from state health insurance regulation is not premised on any genuine absence from all  insurance markets, the article explains about self-insured plans' participation in the stop-loss insurance market.  Stop-loss is secondary insurance and designed to protect against some of the risks of self-insurance.

Finally, explaining the transformation of the stop-loss health insurance market as small to mid-size employers flood the market seeking cost savings from ACA-initiated additional insurance regulation, the NYT connects the dots. The stop-loss market responds by cherry picking among the new refugees on the basis of — you guessed it — health status of the employee group, reintroducing underwriting by small group to places where it had been eliminated for individuals by the Affordable Care Act. 

The moral of the story? Wherever and whenever we have competing insurance products whose profitability is determined  by calculating every health care payout as a loss, the insurance markets will respond accordingly — ever inventing more methods, even if once or twice removed, to screen those who need health insurance out of the health insurance marketplace.  

Lots of people ask me what a health insurance exchange will look like.  I've been telling them that they may visit the Massachusetts connector for one example and that California's site will be up soon.  Now I have to amend that: Covered California may be visited here: http://www.coveredca.com/

Now the harder question still remains unanswered: what will it be like to actually use the health insurance exchange to try to acquire health insurance? The conventional response seems to be that the exchanges will be modeled on Travelocity.

I guess it all depends on your most recent experience with Travelocity and whether you think the kind of sophisticated value-driven computer-savvy consumers that use a site like Travelocity were the ones I am most worried about in the Exchanges.

 

 

Anyone interested in bringing American low wage workers into health insured status ends up having to take a look at Wal-Mart. Wal-Mart employs an estimated 1% of American workers, though it does not insure 1% of American workers.  No one outside Wal-Mart's confidence knows exactly what percentage of its total employees it does insure with commercial insurance.  But this is part of what makes looking at Wal-Mart interesting — Wal-Mart is a brilliant illustration of our larger ambivalence over employer- sponsored health insurance, an ambivalence not entirely resolved by the Affordable Care Act.

Wal-Mart gained notariety for its own ambivalence over providing employer-sponsored health insurance in the public arena in 2005 with the release of internal documents discussing the need to drive down employee health care costs — among other employee benefit costs– by strategizing the hire of younger presumably healthier and perhaps childless individuals.  In a company where only 46% of then current employees received company-sponsored health insurance and 5% of employees were enrolled in Medicaid, the documents were an embarassment for their candor but not for their accuracy.  

In fact, Wal-Mart and every large employer of low-wage and low-skilled employees had  and has every incentive to seek the employment turnover necessary to keep health care costs low and demand for employer-sponsored health insurance lower, particularly for sometimes expensive family coverage.  The origins of employer-sponsored health insurance were, in fact, to reward higher wage skilled workers to remain with their employers in the labor shortage World War II production era.

Looked at from a pragmatic perspective, Wal-Mart's interest (as outlined in the 2005 documents) in advance screening job applicants for better health status by requiring lifting, carrying, and walking in every job description could be lost by accepting the possibly not-so-robust spouses of new employees  screened in this way.  Absent requiring the spouse of a potential Wal-Mart employee to demonstrate the capacity to lift, carry, and walk, Wal-Mart knew it would be difficult to forecast costs.

There have many twists and turns in the Wal-Mart employer-sponsored health insurance story since that time. I cannot do justice to them here beyond noting Wal-Mart expanded the generosity of its employer-sponsored coverage.  

Just recently, presumably in anticipation of the ACA's expansion of Medicaid, Wal-Mart announced a plan to exclude newly hired employees who work fewer than 30 hours a week from employer-sponsored coverage.  The low wage earners among them will have to look to subsidized purchase in the exchanges or to Medicaid. States that do not embrace the optional Medicaid expansion under the ACA are likely to have substantial numbers of low wage workers too poor for subsidized purchase in the exchanges but too rich for Medicaid.

In the same time frame, Wal-Mart has announced plans to expand and strengthen their Centers of Excellence Program where, beginning in a small way in 1996, Wal-Mart has been experimenting with direct contracting for certain procedurally based care with some of the highest quality and lowest cost providers in the country.  And Wal-Mart — master of distribution chain logistics — will transport its eligible employees and their caregiver companions to these centers.  

This is a powerful move towards quality and better outcomes for Wal-Mart employees who are fortunate enough to be covered under Wal-Mart's employer-sponsored insurance.  And we will all benefit, whether or not we are Wal-Mart employees or even Wal-Mart shoppers.  We all benefit because the very largest employers to directly contract in this way (in this Wal-Mart is joined by PepsiCo and Lowe's Companies, Kohl's and others) send a strong signal to the market for commercial insurance that cost-effective quality care will be sought even if health insurance intermediaries lack the interest or incentives to organize health care provider contracting in this way. Sometimes called "steering" in the world of health insurance, we can see that direct contracting steering whatever number of lives Wal-Mart currently controls will make other employers — large and small – consider steering in this way as well.

So, there we have it.  A history of employer-sponsored health insurance designed to serve the interests of higher-wage and skilled employees and their employers struggling to find a place in time and history where the low-wage unskilled want in to the employer-sponsored health insurance tent. And an incipient revolution in  health care service contracting for those lucky enough to be inside the employer-sponsored health insurance tent designed to make the care delivered there higher quality and more affordable.

Here we see further tracings of a three tier health care system: commercially insured, government-funded insured, and uninsured all illustrated and amplified in the employee group of one large American employer.

 

 

 

My month long guest blogging stint here at Prawfsblawg is over. Thank you all for your kindnesses and for the opportunity.

Even with 31 days to work with, I never got to blog here on many of the topics on my dream list: Health Care Price Transparency — Transparent to Whom? 
Scope of Practice Wars Meet the Contraception Wars: Advance Practice Nurses Independently Prescribing Contraceptives in California 
A Nation of Liars and Cheats: How Our Health Insurance System Both Shows Us Who 
We Are and Who We Might Be

I will pick up the thread on my own blog, Missouri State of Mind, at: https://marciarille.com/

It is an amazing moment to be a health law scholar, teacher, and student.

 

Arizona Governor Jan Brewer has decided to endorse Medicaid expansion
under the Affordable Care Act. Since this decision requires state
legislative approval in Arizona, I am still puzzled as to why press
coverage implies this is also Arizona's decision. Her decision was to
stake out the governor's position. What the State of Arizona will do
remains to be seen.

Still, it is an amazing thing — a show stopper really — to see the
governor of the last state to participate in original Medicaid come out
in favor of Medicaid expansion. Governor Jan Brewer — she who
bolstered her political reputation by publicly wagging her finger at
President Obama on the tarmac — is all in on Medicaid expansion.
Whether this marks the triumph of mathematical calculation over ideology
will never be known.

The most important constellation of issues surrounding the NFIB v.
Sebelius decision, however, is not whether states will ultimately
opt-in to the Medicaid expansion. The Medicaid opt-in is, like original
Medicaid, not so much the federal government making the states an offer
that they cannot refuse as making the states an offer that they
desperately want to find a reason to accept. Even Arizona, after all,
ultimately opted-in to original Medicaid, in 1982, with the creation of
its Arizona Health Care Cost Containment System ("AHCCS"), still
advanced as "Arizona's single state Medicaid agency" under the authority
of a negotiated 1115 Medicaid waiver in place to this day.

What I really want to consider is what concessions will states
bargaining in the shadow of NFIB v Sebelius be able to exact from the
federal government in exchange for participation in the Medicaid
expansion? And how big will the federal government allow the states to
dream? Arizona's original AHCCS waiver, for example, was to include
all state employees in its program — a daring proposal that has not
survived implementation. At least six states have expressed some
interest in bartering block-grant authorization of Medicaid for their
state’s participation in the Medicaid expansion.

Medicaid is and has always been a heavily negotiated program,
particularly as it applies to “optional populations”. Now that
individuals at between the federal poverty level and 138% of the federal
poverty level are “optional populations”, the negotiations seem likely
to increase in intensity. There are currently 426 active Medicaid
waivers. This is not uncharted territory. It is merely, for the ACA, an
unexpected voyage.

The history of Medicaid reveals the existence of enormous state power
to demand unique degrees of buy-in to Medicaid expansion. That is the
lesson of the state-by-state brokered buy-in for original Medicaid.
That is also the lesson taught by the historic use of the Health and
Human Services (“HHS”) Secretary’s Section 1115 waiver authority to
allow an extraordinary range of state-level experimentation. Section
1115 strongly suggests that the HHS Secretary may offer states
individual bespoke Medicaid programs. But whether states can demand them
is a harder question.

Excerpted from "Let Fifty Flowers Bloom: Health Care Federalism After
NFIB v. Sebelius" (forthcoming, draft available on SSRN) and a follow
up work in progress: "The Medicaid Gamble."

x posted at http://prawfsblawg.blogs.com/

 

If you saw the recent Wall Street Journal article on the development
of Smartphone apps to detect skin cancer, you may already be wondering
about specialty physician over-supply. 

The University of Pittsburgh Medical Center study discussed in that
article did not particularly endorse the three apps studied that used
algorithms to analyze moles — quite the opposite.  They need work.

Though the study did not like the fourth app as well — the one with
the astonishingly accurate results that used a system that forwarded
data and images to board-certified dermatologists for remote review at a
cost of $5 per mole — you could tell Christopher Weaver at the Wall
Street Journal was intrigued. I am as well.

Teledermatology is not particularly well developed in the United
States but is fairly advanced in Australia, another large country with a
significant rural population and a chronic problem with various kinds
of skin cancers.   Australia's teledermatologists have fractured the
traditional dermatology appointment, much like the app, reserving
specialized visual work for the dermatologogist and leaving lab sampling
to hands-on primary care providers.  This means that dermatological
care for some Australians is provided, in part, remotely.

There are many other health care related apps out there but not as
many as you might think.  In fact, health care apps are widely discussed
as under-developed in the United States. ( If you have one in mind,
here's a forum for you to seek fame and
fortune: http://rwjf.org/en/about-rwjf/newsroom/newsroom-content/2012/12/foundation-announces–200-000-developer-challenge.html?cid=Xtw_qualequal.
 No worries if you miss today's deadline, this is an ongoing series of
competitions.)

If one remotely-located dermatologist is able to  perform these
dermatological readings for many primary care providers, it is not
difficult to imagine a trend line on dermatology: fewer dermatologists
practicing remotely in ever larger specialized practice settings.
Indeed, this is something we can already notice in some parts of
radiology.

Interestingly, as in radiology, the specialization of the visual
exam reader may also improve accuracy — both in screening function and
in elimination of expensive-in-every-way (financially, clinically,
emotionally) false positives.  I think of this as the paradox of
learning to have clinical confidence in the doctor you never meet, the
super specialized mammogram reader, for example,  you hope you never meet.

Even if this raises interesting questions about specialty physician
supply, what about the primary care physician shortage? This one you see
everywhere because, after all, how are the many millions of newly
insured Americans going to access health care without a primary care
physician come January 1, 2014? Even the example above contemplates
additional responsibilities for primary care providers coordinating with
remote dermatologists.

I recently had the privilege of teaching in a UMKC Business School
program for physicians–medical directors in particular. I always take
away more than I give from such encounters.  This group was genuinely
concerned about finding the providers — and the needed number of
primary care physicians — to implement the Affordable Care Act.

They have everything to be afraid of in a medical educational system
where fewer than 20 percent of medical students end up working in
primary care. Looked at from another angle, however, times of shortage
may in fact be times of great opportunity. Despite decades of discussion
about re-inventing medical school education (broadly construed to
include post-graduate education), we see only a slight uptick in primary
care physician supply.  

If we re-invented primary care to be oriented toward a team approach
with each team member rewarded for serving to the limits of their
licensed authority and training, we might not need a huge infusion of
primary care physicians.  We might need a huge infusion of advance
practice nurses or health educators or any number of associated health
professionals who might offer primary care services in a team format.
 Rushika Fernandpulle has written in Health Affairs about "The Big
Shortage" along these lines. And, like him, I wonder  do we even have a
physician shortage at all?

Riddle: How many doctors will it take to implement one Affordable Care Act?

Answer: Fewer than you might think.

x  posted at http://prawfsblawg.blogs.com/

Pediatric dental services are included in the essential health
benefits standard of the Affordable Care Act. This means the ACA
requires  individual and small-group plans sold in the exchanges and
outside the exchanges to offer pediatric dental services, as of January
of 2014  – just less than a year from now.   And dental services
already are part of the benefit package for children who are enrolled in
Medicaid. 

Demand for pediatric dental services is about to increase.  But no one knows by how much.

One thing we do know is that the Centers for Disease Control estimate
over two thirds of Americans age 16 to 19 have decay in their permanent
teeth. The CDC also estimates one quarter of children start school with
tooth decay.  How many of these people will step forward for dental
care is unclear. But the school aged population may be screened more
consistently for dental problems now that dental problems have been
identified as a marker for lost school days and because of increased
pediatric dental insurance coverage.

Our Medicaid eligible population is about to boom. Just to give you
some sense of scale, you should know that California estimates a further
900,000 pediatric Medicaid enrollees will soon join Medi-Cal,
California's version of Medicaid.

Another thing we do know is that about half of all currently Medicaid
eligible children have not seen a dentist within the past year. Whether
bringing their parents into Medicaid eligibility as part of what is
sometimes called a "culture of coverage" will increase pediatric dental
demand in the population of Medicaid enrollees is also unclear. This is
especially tricky to forecast since Medicaid dental coverage for adults
— an optional program — is increasingly rare.

One final thing we do know is that some subset of Medicaid enrollees
who have tried to access pediatric dental services but failed, did so
because of an inability to find a dental provider who would accept
Medicaid reimbursement.   This number is hard to quantify but is most
often extrapolated from looking at the percentage of licensed practicing
dentists in a given service area who accept Medicaid reimbursement.
 HHS estimates that twenty percent of the nation's 179,000 practicing
dentists accept Medicaid and notes that the licensed dentist pool has
not kept up with population growth.  Interestingly, the labor supply of
other oral health proffessionals (dental hygenists, etc.) has kept up
with population growth while dentistry has gone grey.

Medicaid dental reimbursements are low. Though they vary from state
to state, they can be as low as 25% of market rates.  The National
Academy for Health Policy did an interesting study in 2008 comparing
Medicaid dental reimbursement rates and the effects of targeted
reimbursement increases as well as reduced administrative paperwork.
Sure enough, raising the reimbursement rate and lowering the
administrative burden increased the number of Medicaid participating
dentists dramatically.

Rate thresholds matter, it turns out, but only if a state has the
funds to raise Medicaid pediatric dental rate thresholds. Some of those
who do not have begun to talk about using dental therapists for some
aspects of oral care.  Known as "mid-level providers" for the place they
take between dental hygenists and general dentists, dental therapists
 are an interesting group. Dental therapists typically have two to three
years of training beyond high school. 

Minnesota is the first state to have established a licensing system
for dental therapists and advanced dental therapists.  Dental
therapists, under either general or indirect supervision, may perform
many of the services we now associate with dentistry: charting,
cleaning, even some work on cavities and more advanced services.
 Minnesota's Board of Dentistry appears to have made at least a
temporary peace with what I call dentistry's scope of practice wars —
the rules and regulations regarding supervisory ratios, services that
may be offered by dental therapists, and the education and training of
dental therapists.

Minnesota's licensing scheme is new. Since 2011, there have been only
a  small numbers of graduates. But we do have substantial experience in
using dental therapists with under-served rural populations in Alaska.
Alaska's Dental Therapist Health Aides ("DHAT") experiment has been
moving forward since 2005 under the auspices of the Alaskan Native
Tribal Health Consortium. The first DHAT trainee cohort was trained in
New Zealand but DHAT's dental therapists are no longer trained overseas,
though it is private foundation money that has done much to launch  and
extend this experiment.

The results for consumers are good, even very good. Care is available
in remote or hard to reach places and is provided in a community
context. Quality measures have been quite high.

Now, remote Alaskan locations  are one thing and rural underserved
populations in Minnesota are another, but I am pretty certain the dental
therapist  scope of practice wars have only just begun. Organized
dentistry is concerned about quality standards, educational standards,
and the  liability concerns of dental therapist supervisors. Organized
dentistry is also worried about oral health care provider competition.

I will watch this story unfold.  California's Children's
Partnership's  recent call for the licensing of dental therapists — in a
state with some of the most restrictive scope of practice rules in the
United States — should be worth following.

I tell my students that,  in health care,  innovation often starts in
the arena of government funded health insurance and spreads to the
world of commercial insurance only later. If Medicaid leads the way in
championing  the use of dental therapists as lower cost providers to
fulfill its promise of pediatric dental services, I assure you
commercial insurance providers both inside and outside of the exchanges
will take note.

So, whoever you are,  just open your mouth wide and say "dental therapist."  

X posted at http://prawfsblawg.blogs.com/