Some Thoughts as we Close out the Year

Nov 30, 2015, 12:33 PM by Melissa Harman

Washington Buzz!
Congress this fall enjoys the absolutely lowest ranking that it has ever had from the American voters. As a whole over 85% of Americans from both main political parties report that they are unsatisfied or very unsatisfied with the job that their elected representatives are doing in Washington.

We have seen little forward movement overall in the past 6 years out of Washington. Some call it “gridlock” while others just call it “standing up for ones’ principles”. Whatever you call it, it translates into a “do nothing” Congress and government from the executive branch through rule making. The absence of alignment and agreement between Congress and the President have led to a virtual absence of foreign policy, of financial policy, and of domestic policy.

So, what is wrong with Congress? I have asked many of the newcomers as well as the old timers in DC and they tell me this:

1. The political parties have both gone to the far right and to the far left; there is no longer “middle-ground” for negotiation regarding budgets or policy.

2. There are absolute “thou shall not’s” that both parties hold dearly and demand that incumbents vote to reflect those absolutes. There are no gray zones for compromise. One is either for or against issues like abortion, a pact with Iraq, immigration, global warming, entitlement programs and so on.

3. No one dares break away from the pact for fear of reprisals at election time in the form of candidates funded by their own party to run against them, a lack of funding from powerful lobby groups, or smear campaigns that ruin the candidates and loved ones.

4. Fear is so predominant that many incumbents follow party leadership’s instructions even when votes are counter to the welfare of those within the district that they represent. Legislative offices listen to the “squeaky voice” (the frequent callers) and the polls to craft their views and legislation rather than solid principles of economics and the long term welfare of the people.

The country’s voters are equally divided and resolute in their beliefs so much so that little real discussion or exchange of ideas is possible. I grew up in East Texas and I remember a friend telling me the story of a new pastor who arrived in a small Texas town with big visions. After a year he shared with his deacons that he felt God had given him a vision for the church to expand into a new building. The pastor asked the deacons to pray about expanding their territory. One of the deacons responded that he would pray about it, but he would not change his mind. He was against the pastor’s vision, and he would remain so!

So why become involved in the political process at all? Many Americans, after all, are opting out of the voting process. Some say that it is that lack of involvement in the primary voting process that has led to the dearth of quality candidates in the election process. A pollster that I met in DC told me that the American people are so predictable that if the election were held this month, that there would be no need to count the votes in 49 states because they have not changed in decades. The only state where an election would need to be held would be Florida because of the changes in the demographics of the state make it so unpredictable. In other words, the pollster believes that 49 states are just like that old deacon with his mind already made up and no arguments, debates or other propaganda is likely to change that! Hence that old definition of “insanity” comes true! Keep doing things the way you always have and expect a new or better outcome does NOT work.

Where have those ideas gotten us?

The House of Medicine did see a change this past year when it came to the Sustainable Growth Rate (SGR) related to physician reimbursement. A “permanent” fix was applied to the budget in that area at the expense of several other health related entities including hospitals so that rates would be set for several years.

After endless attempts to defund or otherwise do away with the Affordable Care Act, it has survived and in some ways thrived. Remember, it was not a reform of health care practice, nor was it a methodology to decrease the costs associated with the delivery of care. In fact, the cost of health care continues to increase modestly and the costs are now passed along to the purchasers of that care who this year will be paying the highest prices in history for health insurance.

How did that happen? Remember in the old days hospitals did a lot of internal cost shifting. That is to say, hospitals set their rates and prices at levels to cover the uninsured, bad debt and so forth. The practice was no different than those businesses who set their price to the customer at levels to make up for shoplifting or bad debt. The uninsured were covered by the insured at the end of the day. The ACA just formalized that process by making everyone uninsured, raising their insurance rates to cover the uninsured which the Supreme Court confirmed as a tax, and established exchanges for the uninsured to acquire insurance coverage. Presto! The 2000+ pages of the ACA can be summarized in one sentence and government control of the insurance industry becomes law!

Looking at the Affordable Care Act, a White House View:
A few weeks ago I had the privilege to visit with one of the White House Domestic Policy staff regarding the ACA. I asked for the notes from a speech she had given to a meeting of the America’s Essential Hospitals. She obliged my request with an email and her speech notes attached. From the current administration’s viewpoint, here are some really interesting facts about the ACA:

1. Improved access to health care is a reality:
a. 17.6 million Americans have gained coverage.
b. Uninsured rates have fallen by 45 percent since 2010.
c. Less than 10 % of Americans are uninsured as of January 2015.
d. 7 million more Americans have a personal physician than they did pre-ACA
e. Hospitals saved over $7.4 billion in 2014 because of less uncompensated care with most of those savings (67%) going to hospitals in states that expanded Medicaid. (Texas did not!)

2. The US has a Health Insurance Marketplace:
a. 9.9 million people acquired coverage as of June 2015 through the HIM.
b. 84% of people who obtained coverage through the HIM received financial assistance, mostly through premium tax credits.

3. Medicaid Expansion:
a. 13.6 million Americans were covered under Medicaid and CHIP in July 2015.
b. 30 states have expanded Medicaid and more are doing so with each passing month.
c. All 10 states with the highest declines in the uninsured expanded Medicaid.
d. The Council of Economic Advisors estimates that uncompensated care costs would be about $8.9 billion lower in 2016 if all states fully expanded Medicaid.

4. Health care costs:
a. ACA created Accountable Care Organizations (ACOs) formed between doctors, other providers and hospitals, have focused on improving the quality of patient care and achieving cost savings by keeping patients well for over 7.8 million Medicare beneficiaries.
b. There has been an actual slowdown in the growth of health care costs over the past decade.

5. Quality of care:
a. Approximately $12 billion in health care costs were saved as a result of a reduction in hospital acquired conditions between 2012 – 2013.
b. 30 day readmission rates fell sharply between January 2012 and December 2013.

6. Health disparities:
a. Uninsured rates have declined more among African Americans and Hispanics.
b. African American uninsured rates declined 10.3 percent
c. Hispanic uninsured rates declined 11.5 percent.

7. Consumer Protections:
a. Coverage denials and reduced benefits are prohibited, protecting 129 million Americans who have pre-existing conditions
b. Lifetime and annual limits on insurance coverage are eliminated
c. Out-of-pocket costs for preventive services such as immunizations, cancer screening, contraception, reproductive counseling, obesity screening and behavioral assessments of children are eliminated.

What else is going on in Washington?
Congressman Joe Barton of Texas introduced in the House of Representatives the 21st Century Cures legislation that would refund the National Institutes of Health with generous increases for dedicated research into major diseases that are costly and deadly. Barton is the hero of most of America’s academic medical centers for his strong support of health research and his vision for prevention of illness in the future. Dr. Callender and I visited with him in November 2015 and heard his personal and enthusiastic support for health research that can improve the wellness of Americans and save money in the future. His measure passed the House, but not without many in his own party voting against the measure (check to see how your congressman voted – for your health or not!). Now the measure goes to the Senate where the usual “do nothing” politics promises to hold it hostage for months. The NIH budget’s shot in the arm is under $100 million and would pale in comparison to many of the other rewards passed out in DC on a daily basis.

In their attempt to get a budget passed between the house and the senate, the congress also devised a rather creative plan to remove hospital based billing for any future clinics established by those hospitals. This practice would severely limit safety net hospitals like UTMB, Parkland, Harris Health and others from establishing clinics in underserved areas.

In addition, there is a major drive apparently by big Pharma to eliminate 340B pharmaceutical pricing which provides discounted pharmaceuticals to safety net hospitals and clinics for use with the uninsured, children, cancer patients, and the poor in general. The proposed elimination would not save any money for the US government, but would enhance pharmaceutical company profits by all accounts. Overall benefits to patients in Texas are enormous and would curtail benefits for hospitals like UTMB, Harris Health, Parkland, Bexar County and others. The cost to Texas would be in the 100s of millions.

Bringing it Home! To Texas!
In a special report to the Austin American Statesman on November 5 this year, Anne Dunkelberg, Director of the Center for Public Policy, noted that “Texas could bring home $7 billion (yes, that is a “B”) annually in federal dollars and cover more than a million uninsured US adults today” if Texas expanded its Medicaid program. Dunkelberg notes that “Texas has already lost more than $9.3 million in federal funds that could be proving health care to low-income Texas right now, with billions more in the line.”

Texas is among 19 states that currently refuse to expand Medicaid citing that Medicaid is a “broken system” and the desire to opt out of it to avoid future financial entanglements with the federal government, the fear of getting caught up in a system in which the federal government withdraws its financial support and Texas has to provide the money to finance the system, or countless other arguments. It has been one of those things on the list to fight with the Obama administration for so long that many have forgotten why they opposed it in the first place. Nevertheless the Texas tax payer if left footing the bill for health care for other states while patients, physicians, and hospitals try to figure out how to meet the overwhelming demands of the unsponsored / under-insured patients in all Texas communities.

Fact Check!
1. Texas can opt out of the program at any time it chooses to do so!

2. Federal taxes paid by Texans are not returning to Texas at the present time; instead they are being distributed to other state who have implemented the expansion program.

3. Medicaid currently provides 42 cents on the dollar for more than half of the babies born in Texas; with Medicaid expansion, that amount would drop to 10 cents on the dollar.

4. Small businesses often cannot financially afford to provide health insurance for their employees; under both the ACA and Medicaid expansion, most of these individuals would be covered. The Texas Association of Business supports expansion.

Senior leadership in Austin has listed a rather long list of interim changes to be studied between the sessions. With the next session schedule for January 2016, the clock is ticking on that lengthy list. There will be numerous public hearings in Austin and around the state as legislators come together to look at those items deemed important for further study by the Speaker and the Lt. Governor. Keep an eye out for come more controversial conversations related to the future of Texas as it relates to immigration reform, health care, public education, transportation, the budget, sanctuary cities, and the like.