Oh My God — insurance works to reduce financial stress

Stop the printing presses, the obvious has been confirmed.  Getting more people with decent health insurance has tended to reduce financial stress.  This is amazingly obvious but important news:

Academy Health:

Examining Massachusetts and using different methods and data, a new working paper by Bhash Mazumder and Sarah Miller (ungated) comes to a different conclusion than Himmelstein and colleagues. The investigators also consider a wide array of financial outcomes, including credit card balances, credit balance past due (over 29 days), fraction of debt past due, third-party collections, credit risk score, and bankruptcy….

The authors found that

the reform significantly improved credit scores, reduced the total amount past due, reduced the fraction of debt past due, and reduced the probability of personal bankruptcy. We find particularly pronounced reductions in the probability of having a large delinquency of over $5,000. These effects tend to be larger among individuals whose credit scores were low at the time of the reform, suggesting that the greatest gains in financial security occurred among those who were already struggling financially.

 In a rational world, this should be used in the argument that health insurance should increase risk taking as the cost of a medical catastrophe or even a medical problem that is non-catastrophic won’t destroy any and all dreams.  But since health insurance in this world would not be tied to massive power imbalances, the lack of humiliation and cap tugging  of the supplicant against quasi-random failure is a bug and not a feature for at least 27% of the population and one political party.



PPO, EPO and HMO — what is the difference?

My company is in the middle of the 2015 product development cycle.  The actuaries are getting a viable clue, the medical management folks are starting to see populations that are large enough to draw reasonable inferences, and our finance folks are seeing the money come in and out.  The project managers are cooridinating and deconflicting and reconceptualizing and MBA buzzword bingoing with everyone else right now.  We’re at the what if stage of analysis.  Can we offer a PPO for the southern tier?  Does making Mayhew Narrow an HMO and an EPO make sense?  What if we only use three provider groups in Big Urban County as a super narrow network?

Can we get the state to approve those decisions?  Last year we filed over a dozen different network and plan design configurations to our state regulators.  We only advertised and sold half of them.

So what are the differences between a Preferred Provider Organization (PPO), Exclusive Provider Organization (EPO) and Health Maintenance Organization(HMO)?  Why should you care as a buyer of health insurance and what do these differences do to an insurance company?

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Watching, Waiting, Anticipating

When should people get treatment?  Should people get treated for something as early as possible?  Or should they wait until later when discrete milestones are passed?  What does the decision tree look like?

The Incidental Economist passes along the latest research on the prostate cancer treatment debate.  The United States has a culture of treatment as soon as prostate cancer is bio-chemically detectable.  Most of Europe has a culture of treatment at a milestone.

NEJMAnna Bill-Axelson and colleagues published the latest findings from the Scandinavian Prostate Cancer Group Study Number 4 (SPCG-4).

RESULTS: During 23.2 years of follow-up, 200 of 347 men in the surgery group and 247 of the 348 men in the watchful-waiting group died. Of the deaths, 63 in the surgery group and 99 in the watchful-waiting group were due to prostate cancer; the relative risk was 0.56 (95% confidence interval [CI], 0.41 to 0.77; P=0.001), and the absolute difference was 11.0 percentage points (95% CI, 4.5 to 17.5)….

Aggressive treatment works in this care.  However IE also passes along a critique of translating this research into the United States.

Second, the results of this study aren’t necessarily generalizable to a US population, as Richard Hoffman explained.

PSA screening became widespread in the US in the early 1990s—a decade before the first SPCG-4 publication. Perversely, the American way was to expend considerable resources to promote screening efforts to find cancers…before knowing whether these cancers could be successfully treated. [So,] the SPCG-4 results are not readily translatable to US practice. Only 5% of the study cohort had cancers detected by screening PSA—the rest either had symptoms and/or a palpable tumor. In the US, a substantial proportion of men with PSA-detected cancers have microscopic disease—which may never cause problems during a man’s lifetime. The US Prostate Cancer Versus Observation Trial (PIVOT) also evaluated surgery vs. watchful waiting. However, PIVOT, which mostly enrolled men with PSA-detected cancers, found no benefit for surgery. Post-hoc analyses suggested that only the small proportion of men with higher-risk cancers (based on PSA and the microscopic appearance of the cancer) seemed to have a survival benefit.

The US research has found that aggressive treatment of bio-chemically detected prostate cancer does not do much to improve outcomes for the general population of biochemically detected prostate cancer patients. Aggressive treatment tends to have significant side-effects as well.

What could a potential decision tree look like that minimizes overtreatment while also minimizing undertreatment?
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A mini-doc fix patch for 2015

Right now Congress is debating primarily on how to pay doctors more to treat Medicare patients than allowed under the Sustainable Growth Rate (SGR) formula in what is known as the doc patch.  This is a recurring “fix” as the SGR would cut provider pay for Medicare patients by 20% to 25% immediately.  Doctors are among the most trusted professions out there, so when they scream as a collective body, the American public will listen.  And when the comparison is against Congress, the American public will believe the doctors without analyzing the argument too hard. 

Congress has passed a doc fix every time that doctors could have potentially faced pay cuts.  Currently there is talk about passing a permanent doc fix.  The question is finding the pay-for.  I would be more than willing to take a public option or the Veterans Administration offering their formulary for Medicare Part D in exchange for giving doctors more money.  Republicans don’t want those policy trades that would be net deficit reducing.

There is a strong potential for a second doc fix style situation to come up this November and December.  PPACA for 2013 and 2014 changed the rate that Medicaid pays primary care providers (PCP) for primary care services.  Instead of getting the baseline Medicaid rate, providers that are either board certified PCPs or perform mostly PCP billing codes, these providers would get the Medicare rate.  

The change to a Medicare baseline is important.  Right now for physical health fee for service, Medicaid tends to pay significantly less than Medicare which pays a bit less than narrow network Exchange which tends to pay significantly less than broad network Exchange/Group Commercial which tends to pay less than non-par out of network.  Bumping Medicaid pay to Medicare rates reduces the incentive for doctors to treat current patients who are on Medicaid but to not take any new Medicaid patients while holding those slots open for commercial or Medicare insured individuals. 

The goal of the program was to act as a two year bridge to expand the PCP universe who would accept new Medicaid expansion patients.  From my point of view, it has been successful in opening up panels.  The problem is that it was a temporary two year path.  Current law assumes on January 1, 2015, Medicaid PCP service fees will be reduced by 25% to 50%.

I don’t think that will happen quietly.  Doctors are an amazingly well organized lobby with high degree of political trust.  The Democrats want primary care providers happy to take Medicaid patients and Republicans count on doctors as a major donor class, so I think something will be done if it can be done in such a way that Republicans can facially claim that they are not funding Obamacare. 

 








Sex, driving and Jevon’s paradox

The reactionary argument that providing birth control to women in order to increase their personal autonomy will lead to more sluttiness which is a bad in and of itself.  Once we strip out the patriarchial authoritarianism it sounds like a Jevon’s paradox argument:

improved efficiency lowers the relative cost of using a resource, which tends to increase the quantity of the resource demanded, potentially counteracting any savings from increased efficiency

Properly used birth control lowers the potential costs of any given sex act by at least reducing pregnancy risk if not also disease risk.  Therefore, more people will have more sex,(why is that a bad thing?) and this increase in sexual incidents will lead to the same number or more of pregnancies, STDs or sexually empowered women.

That is the argument.  

The Incidental Economist passes along an interesting  study that looks at how women change their sexual behavior once they go on birth control:

We observed a statistically significant decrease in the fraction of women and adolescents who reported more than one sexual partner during the past 30 days from baseline to 12 months (5.2% to 3.3%; P<.01). Most participants (70-71%) reported no change in their number of sexual partners at 6 and 12 months, whereas 13% reported a decrease and 16% reported an increase (P<.01). More than 80% of participants who reported an increase in the number of partners experienced an increase from zero to one partner. Frequency of intercourse increased during the past 30 days from baseline (median, 4) to 6 and 12 months (median, 6; P<.01). However, greater coital frequency did not result in greater sexually transmitted infection incidence at 12 months.

The cost of sex is an amazingly complex multi-variate problem with health, emotional, social bonding, and physical interactions.   Read more



Complexity is costly — PA Medicaid Expansion

Pennsylvania is currently a limited Medicaid eligibility state.  The governor, Republican Tom Corbett, has filed an 1115 waiver application with Health and Human Services for the Arkansas style ‘private option’ expansion.  The expansion would give individuals who make less than 138% of Federal Poverty Line (FPL) subsidies to cover the full cost of their cost-sharing assistance Silver plans (96% actuarial value) while current Pennsylvania Medicaid has close to a 98% actuarial value.  The original waiver filed last month has the following conditions on eligibility:

  • Income determined once a year
  • Premiums of$25 for a single adult or $35 for married couple for households over 100% FPL.
  • Wellness program
  • Job Search requiremetns with termination from coverage as a sanction (p.36 of the waiver)

As I said yesterday, HHS is quite willing to grant significant flexibility for Medicaid expansion waivers as long as there is no poor shaming and everything in the waiver has some logical connection to either health quality or health costs.

The last requirement for job search with termination of coverage if an individual fails to meet the requirements does not meet the WHAT THE FUCK test for health quality or health costs.

The Corbett Adminstration seems to have been quietly hit with a clue stick, and they’re proposing a new alternative that is structured as an incentive instead of a punishment.  Newly enrolled individuals would be able to see their premiums reduced if they worked.

  • 40% off for full time work
  • 25% off for 20 to 29 hours of work per week
  • 15% off for either less than 20 hours of work per week or job search participation.

If this is approved ( I don’t think it will be), then this will be an expensive fiasco.  It is an added layer of complexity to an already complex population base.  Complexity costs money in general, and the job search step-function of eligibility and benefit design means claims will have to be regularly manually re-processed.  That is expensive.

I’ll explain the details below the fold.

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Good News Everybody

New Hampshire is the latest state to get on board with Medicaid expansion.  They still will need approval of a waiver from Health and Human Services, but the New Hampshire government is extremely likely to ask for an Arkansas style “private option” waiver.  HHS has been willing to grant those waivers as long as there is no poor shaming involved.

Via TPM:

The GOP-controlled New Hampshire Senate approved a privatized plan for expanding Medicaid under Obamacare Thursday, opening the door for the state to become the latest to adopt the expansion…

The Democratic-controlled House is expected to approve the plan, and Democratic Gov. Maggie Hassan has expressed her support. About 58,000 New Hampshirites are expected to gain coverage under the expansion.