Get the basics right SATSQ

Is knowing what you’re talking about an automatic disqualification from writing about health policy at Forbes Magazine?

Josh Archambault at Forbes last June was advocating that Gov. Corbett (R-PA) pull the application for a waiver for Healthy PA because it was not reformy/screw the poor enough and fucks up some basic facts:

The flawed design of Healthy PA is also likely to result in higher costs to taxpayers.  Similar to the “Private Option” Medicaid expansion in Arkansas, enrollees under Healthy PA can purchase any “private coverage option” in their geographic area without any additional financial cost to themselves.

This provision alone could drive costs sky-high.  Enrollees have no financial incentive to keep costs low. In most regions of the state, the most-expensive plan costs more than twice as much as the least-expensive plan. Healthy PA enrollees are likely to flock to these Cadillac options, as they typically have broader provider networks and better prescription drug coverage. When enrollees pick these more expensive options, the tab picked up by taxpayers will skyrocket.

Wow, there is a lot of fail here.

First, Pennsylvania is not using the Arkansas model.  Arkansas Medicaid expansion is being used by a pure premium support model.  Arkansas Expansion gives people who make under 138% FPL sufficient subsidy to buy a cost-share Silver plan.  This means Arkansas residents who qualify for expansion are placed in the same risk pool as Exchange eligible individuals who make more than 138% FPL. 

Pennsylvania is reinventing the wheel.  Pennsylvania is already a managed care state for its current Medicaid population.  This means the state gives its Medicaid money to private insurers/managed care organizations (MCOs)who then pay for services in an HMO-like arrangement for Medicaid benefeciaries.  Some of those insurers only work in the Medicaid field.  Some also sell in the commercial, Medicare, CHIP and Exchange markets.  The Pennsylvania Medicaid expansion  creates “Private Care Organizations” that will offer two plans per region in the state.  The two plans will be for medically frail/high need, and generally healthy/low need.  These plans are not being offered on the Exchange, they are not being offered to employer sponsored coverage, they are not being offered to anyone else. 

There is no chance that Cadillac style plans will be offered as the level of the capitation payment will be no where sufficient to cover that as 1115 waivers require net federal budget neutrality over the life of the demonstration project.  The reimbursement rates that the state gives to the PCOs will be, age/gender/health status adjusted, similar to what MCOs currently get.  The networks and benefit designs will be similar to what is currently offered on privatized Medicaid. 

Currently, if my college roommate’s younger sister who lives in Philly was Legacy Medicaid eligible, she would sign up with the state, and have her eligibility determined.  She would then get a choice of four or five different insurers.  Her benefits might change slightly due to her health situation (pregnant women get better benefits etc). She would not see the capitated payment level that she brings with her to her choice.   Under the Healthy PA waiver, she would have her eligibility determined, get a list of five plans at either the high risk or low risk group, make a choice and get an insurance card three weeks later.  Again, she does not see what the capitated payment the state makes to her new insurer.  The cost control device is not the indivual bearing the cost of coverage, but the insurance companies being told that they are getting a flat and fairly low head fee.  The PCOs will aggressively prune networks of high cost providers and continue aggressive utilization review. 

Rhetoric: Healthy Pennsylvania Private Coverage Option will reduce overall premium costs in the Commonwealth, by reducing emergency room visits and requiring less uncompensated (charity) care.

Reality: The promise of lower premiums in the private health insurance market resulting from Healthy PA rests on the hope that adding 500,000 individuals to the market will reduce costs.

Data, it is a wonderful thing:

Colorado Hospital Association
 did a fairly comprehensive study of 28 states (expansion and non-expansion) on charity care and self-payments from early June:

self-pay volumes and charity care experienced the opposite effect, with hospitals in expansion states recording significant reductions in these at the start of 2014. This decline in self-pay and charity care, occurring in parallel with the growth in numbers of Medicaid beneficiaries, shows that previously uninsured patients are now enrolled in Medicaid. Many hospitals provided on-site assistance to enroll eligible patients into Medicaid, promoting the recruitment of patients into Medicaid who otherwise would have self-paid or been provided with charity care.

The changes seen here are not only distinct, but also substantial. The Medicaid proportion of total charges increased over three percentage points to 18.8 percent in 2014 from 15.3 percent in 2013, representing a 29 percent growth in the volume of Medicaid charges. When compared to the first quarter of 2013, there was a 30 percent drop in average charity care per hospital across expansion states, to $1.9 million from $2.8 million. Similarly, total self-pay charges declined 25 percent in expansion states, bringing its proportion of total charges down to 3.1 percent from 4.7 percent. In contrast, the proportion of Medicare volume shows little variation through first quarter 2014.

 So charity care is going down significantly in Expansion states compared to non-Expansion states, and the model that he argues is fatally flawed by giving too rich of a benefit to poor people is not actually the model being used.

SATSQ: Yes, knowing what the fuck you’re talking about is a fireable offense if you write about healthcare for Forbes.

36 replies
  1. 1
    Joey Maloney says:

    Is knowing what you’re talking about an automatic disqualification from writing about health policy at Forbes Magazine?

    No. But if you know what you’re talking about, being willing to lie is an absolute requirement.

  2. 2
    MattF says:

    Forbes is a ridiculous magazine. I’m repeatedly surprised at the number of people who don’t quite realize that. Maybe confusion with Fortune, since they both start with the same letter.

  3. 3
    Baud says:

    Seems to me that whether Josh Archambault knows what he’s talking about is completely irrelevant to Forbes. What they care about is the message he’s willing to send in his writing.

  4. 4
    Tommy says:

    @MattF: 20 years or so ago I read it in college/grad school and honestly I thought it was a wonderful publication. I guess the younger Forbes isn’t nearly as smart as his father. Because you couldn’t pay me to read it now, much less follow any advice they give. I will catch a clip online from the Fox Forbes show they have ans I openly wonder out loud if people actually take investment advice from these people.

  5. 5
    Tommy says:

    @Baud: I have a couple clients that deal with health care. They set up benefit plans for mid-to-large size employers. I am nothing close to an expert on the topic, but I try to follow the basics so I can understand my client’s business and have productive conversations with them.

    I think it goes without saying that with all the resources we have in 2014 there is NO reason not to get the facts correct. I get several daily emails from the Kaiser Family Foundation about health care. Be it the ACA, Medicaid, you name it. They make it easy to understand even for a novice like myself.

    And the good news from these emails and the writing of Richard right here, no matter what you might hear on the news (yes even MSNBC) the ACA is working much, much better then being reported. Are there some things Congress should tweak, change, or remove? Sure. But all in all if it wasn’t for the 36 states that wouldn’t take “free money from the Feds” the law is pretty darn good and IMHO only going to get better.

    I wasn’t sure that was always going to be the case, but I am VERY happy I was wrong!

    Update: You can get the Kaiser Family Foundation daily emails at the below URL. If health care is something you care about they are a god sent.

  6. 6
    Baud says:


    I’m afraid a lot of folks out there don’t want the facts.

  7. 7
    Tommy says:

    @Baud: No you are right. I am reading a report by Kaiser Family Foundation related to a document produced by the Trustees of Medicare Part D. This report gets a little wonky, but if I am reading it right (1) 2 million more people joined last year for a total of 37M. (2) Cost are remaining static.

    That second point they are promoting, saying it is getting missed in the press (if they cover it at all) that since 2010 enrollees pay premiums of $37.75 per month. That is a flat line of growth. In an industry that can see increases in cost of 15%/year the cost of drugs in this plan are staying about the same, and even dropping.

  8. 8
    Villago Delenda Est says:

    @Baud: The facts have a very nasty habit of getting in the way of the ideological paradise that they’re looking for.

    Damn liberal bias of facts. It’s fucking everywhere!

  9. 9
    OzarkHillbilly says:

    @Baud: Propaganda is so much more easily digested.

  10. 10
    Alce_e_ardilla says:

    The ACA will have this perception among the general public for several more years at least, because most nonwonks can only process the reality in front of them which is colored by stories of friends or relatives having horrible problems, or falling through one crack or another. The good news is that when they finally figure it out, they will scream bloody murder if someone tries to take it away.

  11. 11
    MomSense says:

    I just read this opinion piece in the Bangor Daily News that I thought sort of fits in with this post but from the perspective of how people find themselves needing Medicaid. I am looking forward to the rest of this series.

  12. 12

    I have got to believe that the three Presidents who signed laws that will actually save significant American lives are Presidents F.D. Roosevelt (Social Security) , Johnson (Medicare, Medicaid) and Obama (ACA).

    Where does this place Obama in history?

  13. 13
    OzarkHillbilly says:

    @The Other Bob: You left out Nixon and the EPA.

  14. 14
    Tommy says:

    @OzarkHillbilly: Nixon is well Nixon. But he did create the EPA which is kind of both cool and important. My best friend when I lived in DC worked for the EPA. He was first of his class at Michigan State. First of his class at Michigan law. Sure he could have decided to work at a firm where he made a ton of money. He choose the EPA. He is an “enforcement” lawyer there. A laid back guy, but you pollute he will find you and bring the hammer.

  15. 15
    rikyrah says:

    thanks for the information. you absolutely rock, keeping us up to date.

  16. 16
    grandpa john says:

    Steve Forbes, another buffoon who was born on third base and thought he had hit a triple

  17. 17
    Patricia Kayden says:

    Richard, is it too late for you to write a letter to the editor to address those glaring errors? Wonder if Forbes would print it.

  18. 18


    “You left out Nixon and the EPA.”

    I actually considered adding Nixon to the list. I am sure the EPA saves lives, not sure if it is as direct as health care, but I agree with you.

  19. 19
    OzarkHillbilly says:

    @Tommy: Yes, and Johnson was well, Johnson, and FDR was FDR, neither of them were saints and I doubt Obama is either. Wasn’t my point. Only trying to point out that on the “saved lives” scale, the EPA is right up there with SS and Medicare/Medicaid.

  20. 20
    ruemara says:

    You’re looking at propaganda and wondering why it’s not information.

  21. 21
    boatboy_srq says:

    @Baud: Agreed. SLIGHTLY OT: I was in a CVS yesterday and watched some ID10T throw a tantrum because CVS isn’t selling death sticks anymore (corporate decision, affecting all stores). NATURALLY, the genius blamed the state (BTW it’s Virginia which remains remarkably tobacco-friendly) and stomped out muttering about “getting out.” I would love to see the look on his face entering his first CVS in South Carolina…

    @Tommy: It’s really frightening when you consider that Nixon is too LibrulSoshulist for the Teahad. EPA, SALT, etc…. Good for your friend: we need more JDs like him.

  22. 22
    OzarkHillbilly says:

    @The Other Bob: I would argue that maybe even more so, tho stats could well prove me wrong as it is only a gut feeling. Still the EPA is something I know has improved the quality of my life and in the end will definitely increase the quantity. STL has long had a problem with ozone pollution in the summers (I can feel it in my lungs) and I can not imagine how much worse it would be without EPA regulation. Everyone loves to complain about getting their cars sniffer tested but I wonder how they would feel if the air was as bad as it is in Beijing?

    Besides, I am old enough to remember pre EPA, not so much the others. That probably prejudices my POV.

  23. 23
    Ruckus says:

    Obviously so does the word and concept of Fuck.
    As in let’s Fuck over anyone not rich.

  24. 24
    Ruckus says:

    @grandpa john:
    I think in Steve Forbes case he was born on home plate and he thinks he won the game world series, without breaking a sweat.

  25. 25
    Davis X. Machina says:

    @Ruckus: The saddest thing I’ve seen in a lifetime of watching New Hampshire primary coverage — the media coverage is either Boston or Portland-centric — was this posse of J. Press-ed, en-khaki’d tools clearly all named ‘Chadd-with-two-d’s’, or ‘Tod’ -with-one -d’, waving signs outside some Forbes media opportunity in ’96 and pogoing up and down — enthusiasm? A failed effort to keep warm? — chanting “Freezin’ for a reason! Steve Forbes!’ in a gentle snowfall….

    I hope they were paid. That would be sad. But if they were actual, true-believing, volunteers? Terminal despair seizes me just to consider it.

  26. 26
    Ruckus says:

    I was born, raised and live in Somgville, more commonly known as Los Angeles. Is it better? You bet your ass it is. Is it worth every other year getting your car smog tested? One million percents worth. As a pup there were days where visibility was less than 5 miles and with fewer people and cars. Days with visibility of 10-14 miles was considered good, there were only a few days a year where visibility was better than that. And that’s the crap you can see, let alone what else went into our lungs. In college 40 yrs ago I saw a cadaver with what looked like a pretty good starter case of black lung, but the Dr said no and he wasn’t even a smoker, that was just from living in the LA area.
    Yes the EPA and the California version have done a tremendous lot for our lives. Burdensome regulations my ass.

  27. 27
    Mike in NC says:

    Forbes…Weekly Standard…National Review…Reason…

    They say there are people out there who will actually pay good money to read that crap.

  28. 28
    Mike in NC says:

    @Ruckus: Slightly less charisma there than Rick Santorum or Newt Gingrich.

  29. 29
    Ruckus says:

    @Davis X. Machina:
    As some one up thread said, Malcom was not quite the tool that young Steve is. The magazine had some good points 30-40 yrs ago. But it has taken the same hard right turn that so much of the rest of our media has over the past 3-4 decades. I don’t have any first hand (or second or third….) experience but it must be nice to have far more money than can be spent in 10 lifetimes, otherwise why would they act like the world and everyone in it owes them that 11th lifetime of too much money?

  30. 30
    piratedan says:

    and what really sucks is that guy got paid to write that article that has no basis in truth and it will be perpetuated in wrongness, without correction, to dupe unsuspecting others. These guys apparently feel little to no remorse about being wrong, little compunction to do the right thing, they’re huddled in their corners with their wealth, doing their level best to not have to share it with anyone for some misbegotten fear that to do so somehow diminishes them.

  31. 31
    The Thin Black Duke says:

    @piratedan: What the infamous videotape of a sneering Romney talking about the “47%” proved was that rich people only like other rich people. Everybody else taking up space in their world are meaningless statistics to be subtracted.

  32. 32
    Roger Moore says:


    Burdensome regulations my ass.

    There are a lot of burdensome regulations dealing with our air quality. It’s just that they’re better than the alternative of air that poisons us. The problem with the conservative arguments about regulation is that they don’t acknowledge the relationship between the regulation and the good it does; they seem to assume that they can remove regulations while still getting the benefits those regulations provide.

  33. 33
    J R in WV says:

    @The Thin Black Duke:

    I could barely believe my ears when I heard that talk Mittster gave to his contributers. It was so extreme, so over the top, so hateful. In an election candidates can hold beliefs like that, and use code words to let folks know they agree with hateful voters, but to spell out your hate for 47% of the population with an explicit number like that is monumentally stupid!

    Because just as in that case, you never know when an opponent is listening to your babble, and obviously, today, potentially recording you with a very small and ubiquitous gadget in almost everyone’s pocket.

    Because there are lots of Christian people who work hard to better that 47%, Presbys, Episcopals, the old school Christians who believe in the fable’s message about good works. And of those people, there are some who will reject a candidate who rejects the concept of doing good work, of helping the 47% to a little better.

    Once both the 47% AND people who believe in good work are against you, it is getting really hard to get past the 50% point and win an election.

    We really missed a bullet with Willard, he is not only very stupid, but his stupidity has led him into evil in a big way. He would have been tragic as President, at least as bad as G W Bush, maybe worse, on account of his odd religion combined with his actual evil and stupidity.

  34. 34
    boatboy_srq says:

    @Ruckus: Somgville has become a better place to breathe than Denver, St. Louis, Houston or Atlanta. We can thank the EPA; wingnut Randtards will simply point out that the residents of those other cities a) chose to live there, b) chose not to invest in air-cleaning equipment for home/car/office/mall/restaurant/salon/school/whatever, and c) are exercising their Gawd-Given Right to die early of ailments easily prevented. They made the same complaints about public sewer systems, lead paint, and other local/household hazards.

  35. 35
    Ruckus says:

    @Roger Moore:
    We have to stop calling them burdensome. They just aren’t. They get good results. Could we get those results any other way? No. Are they regulations/laws that we all have to deal with? Sure they are, and they may have some pain involved, like the $45 and an hour of my time that I spent this week getting my POS checked, but they are not burdensome. They are the cost of living in a society that values our lives and is at least trying to make them better, and in this case have wildly done so. The smog laws have made the air cleaner, have made your car last longer and made them work better. They did that by forcing the automotive world to improve, something that they may have done on their own. Oh man I crack myself up. That would not have happened without these regulations. Let’s not give those who think we can live in a civilized world without laws and regulations (as flawed as that civilized world is, and it is flawed, no mistaking that) any ammunition to make the asinine argument that all regulations are burdensome, just because.

  36. 36
    Chris T. says:

    @Ruckus: Damn these burdensome regulations that keep my neighbors from shooting, stabbing, and poisoning me!

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