Who files their taxes on February 7th?

I do my family’s federal taxes by Valentine’s Day as we have two kids in daycare, and the refund is a nice means of forced savings that pays for a couple of months of day care with psychologically bucketed “Extra” money. People who are anal retentive or OCD(ish) tend to file early as well as people who know they qualify for Earned Income Tax Credit and need the money immediately tend to file early. Individuals who know they have a complex tax situation may start the process early. But most people who know they have a relatively simple return and don’t need the money immediately don’t file their taxes in the first week of February. They instead wait until the Final 4 is over before filing.

This is important as Obamacare enrollment pace is picking up. The early anal retentives or known needers are filing for insurance but more and more people who are not chronically ill are beginning to get on board:

Covered California has some good data:

The rate of enrollment in Covered California health plans has also increased. As of Nov. 19, 79,891 Californians had selected a health plan. Compared with the first week of October, during which about 700 people a day selected a health plan, the enrollment rate nearly quadrupled by the second week of November, to about 2,700 plan selections per day.

It is looking like California is seeing a November activity rate that is at least three if not four times higher than October’s rates.

One big difference on the timing of filing for taxes and buying health insurance on line is that most people who file a tax refund expect either to break even or to get money back.  People looking to buy health insurance are expecting to spend some money.  Getting money for free is a motivator while spending money is a depressor of action.  Using this logic, we should expect to see more early Medicaid sign-ups as the cost to the individual is effectively nil while Exchange insurance costs money which will lead to delay and surge.

Not all dollars are equal

I saw this article in the Politico:

key player in the Obamacare website’s creation acknowledged Tuesday that up to 40 percent of IT systems supporting the exchange still need to be built.

“It’s not that it’s not working,” Chao told lawmakers at an Energy and Commerce Oversight and Investigations subcommittee hearing. “It’s still being developed and tested.”Financial management tools remain unfinished, he said, particularly the process that will deliver payments to insurers.

A Health and Human Services source said the health plans can receive the payments consumers make when they enroll. The system isn’t yet ready to deliver federal subsidies to insurers.


First, Politico undercuts its own lede.  The financial segment is not live in the production environment but it never was scheduled to be live until December.  The first subsidy was not scheduled to be sent to the insurance companies until late December if everything works correctly.  More importantly, this is not a system failure point as most insurers could get by for a while without Federal subsidy flows.

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Individual Medical Loss Ratios and luck

The Medical Loss Ratio is the percentage of total premium revenue that an insurance company spends on medical care (and a few other minor things) for its members.  PPACA requires a large group insurance premium pools to have an MLR of 85% and small group or individual premium pools to have an 80% MLR.  The difference is because there are significant scale differences.  For instance, the things that I do are required for both small and large groups but take the same amount of time, so my costs can be spread over 5,000 people or fifteen.

Most people in most years will never come close to costing the insurance company the full individual medical loss ratio slice.  That is typical because insurance is a guaranteed small loss to avoid a possible large loss.  Most people are reasonably healthy in most years or have frequent but cheap contact with the medical system in the form of PCP visits, physical therapy, perhaps a broken bone that needs nothing more than a cast or a single incident of kidney stones.

With the exception of the years when the Kids were born, my family has never had a personal medical loss ratio above 35%.  And that is a good thing.  That means we’ve been relatively healthy and what ailments have been minor, transitory and acute.

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Improvements and payment models

From one of my favorite new blogs, Not Running a Hospital on a staffing change in a hospital in Toronto that has shown significant clinical and cost improvements:

 While I had heard about the concept of a patient navigator before today, including at my own former hospital, the navigator service was usually designed to help people of different cultural backgrounds maneuver through the complicated labyrinth of the tertiary care system. At Mt. Sinai, they have taken the concept to its logical conclusion, providing patient navigators for all general internal medicine, surgical oncology, and inflammatory bowel disease patients….

When a patient arrives on the floor from the emergency department, Heather is already on the case, handling a multitude of tasks that previously would have taken time away from nurses or other clinical staff. Heather’s academic training? Fine arts!

This program is supported by philanthropy, as the payment regime from the province of Ontario does not include funding for this kind of service. It is so effective, though, in terms of patient satisfaction and clinical improvement, that the hospital is working on a way to provide sustainable funding.

Ontario Health Insurance Program (OHIP) is a single payer system which primarily uses a fee for service model. A provider does service X and receives so many loonies for that service.  Providers get paid for the services they rendered and not the services that they did not render.  It also means it is an extreme challenge to get paid for services provided by someone without initials after their name.  The incentives don’t line up for the hospital in a fee for service model to make sure their patients know what is going on, know what is expected and needed from them and know where to find follow-up information.

Models where there are fixed fees attached to either a diagnosis or a population change this incentive.  The incentive is to find some way for the patient to manage their own health through their own understanding of requirements and expectations.  A navigator allows the higher skilled and more expensive nurses and doctors to provide high value care instead of setting up follow-up appointments at the rehab center or scheduling a PCP visit in three weeks as well as transportation to the office.


We get what we paid for

Back when I was young and idealistic, I worked for several years at an entity that managed mental health case and care coordination.  I never provided front line service, that is not what I do, but I routinely saw reimbursement fee schedules for mental health providers.  They were absysmal.  A master’s level provider could expect to receive between $45 to $70 per hour for their time in an office setting and perhaps $15 more for in-home services.  The higher rates tended to be from government programs.  That sounds like a lot but that fee has to be able to cover wages, overhead, infrastructure, insurance and education expenses.  As a comparison, when I took Kid #2 into the pediatrician last week for suspected croup, the CRNP was able to get paid $108 for a ten minute visit.  She can do four or five of those visits in an hour.  When I called a plumber over the summer to fix the shower, she got paid $240 for forty five minutes of service.  What we pay is a decent indicator of what we as a society value.  We value working showers and acute medical care far more than mental health care.

Mental health services have always been done on the cheap, and that means there is very little capacity in the system.  Hospitals are more than willing to build $230 million dollar proton beam therapy centers that offer minimal marginal improvement in results for cancer treatment because cancer pays.  At the same time, in-patient psych beds have been cut dramatically.  Some of this is a long term trend, but a signficant amount has been due to state level budget cuts of the past five years. 

Commenter CzarChasm has this to say in an e-mail to me as a front line mental health provider in Virginia concering the Deeds stabbing and suicide:

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