SCOTUS, the Individual Mandate, and Stuart Butler

It’s been a while since I’ve posted here. Just today, a new article of mine was published in Politico Magazine — available by clicking here.

Between now and the end of June, the US Supreme Court will rule on whether the entire Affordable Care Act should be overturned because of, once again, the mandate on individual Americans to purchase health insurance if they can afford to do so, or to pay a tax penalty if they don’t. In late 2017, Pres. Trump and the Republican-controlled Congress reduced the mandate penalty to zero — triggering a new federal lawsuit by the Texas Attorney General to overthrow the whole law.

In anticipation of that, I describe the 33 year history of the mandate in US health policy & politics, with particular attention to the individual who first brought notice to it in 1989, Stuart Butler, then of the Heritage Foundation and now of the Brookings Institution. In the process, I consider the 40 year history of free-market fundamentalism and neoliberalism in the US, an era that I and many others believe is now coming to an end.

I hope you like it and let me know what you think.

US Health Care in Our Neoliberal Era

[This commentary was published by the Milbank Quarterly on June 24, 2020.]

For some years I’ve pondered a Commonwealth Fund chart showing the growth in gross domestic product (GDP) for health care comparing the United States with 10 other high income nations, starting in 1980 and ending in 2018. It shows that 40 years ago, US spending was among the highest but still part of the pack of 11. In the early 1980s, for the first time, US spending leapt above the others, with the distance between the United States and the rest growing ever wider over four decades. This prompts a question: what happened to US health care in the early 1980s–and since then?

Expert opinions abound, as Austin Frakt showed in two New York Times columns on that question, here and here. I suggested then—and now—that a big part of the answer involves the broad economic and political trade winds of the late 1970s and 1980s, often called “Reaganomics” or “supply-side economics” because President Ronald Reagan ushered in a new era in the United States. The term that fits best is “neoliberalism,” which evokes an updating of Adam Smith’s 18th century economic ideas. The 20th century version was inspired by Austrian economist Friedrich Hayek and his key American collaborator, Milton Friedman, among many others. A big part of what happened to US health care in the 1980s and beyond, I hypothesize, for better and worse, resides therein.

Between the late 1940s and the late 1970s, Hayek, Friedman, and collaborators promoted far-reaching ideas to replace the prevailing paradigm of President Franklin Roosevelt’s New Deal liberalism inspired by Keynesian pro-government economics. The neoliberal agenda proposed government reforms in order to guarantee wide-open markets: cutting taxes at all government levels as often as possible, repealing regulations anywhere and everywhere, shrinking or privatizing government at nearly all levels, suppressing organized labor, encouraging free-market trade globally, accepting inequality as the price societies pay for economic freedom, making recipients of publicly provided services and benefits pay as much as possible, and reorienting corporate thinking and behavior to promote return on equity to shareholders as their only legitimate goal. Though health care was not an explicit part of the neoliberal formula, it remained close to Friedman’s thinking (his doctoral dissertation was a frontal assault on government licensure of physicians).

Hayek, Friedman, and company succeeded. Their beliefs became the accepted wisdom of governments across the globe, especially in 1979-1981 with the rise to power of Margaret Thatcher in Great Britain, Deng Xiaoping in China, and Ronald Reagan in the United State, all avid promoters of neoliberal ideas. In prior years, neoliberal ideas (under varied names) had gained prominence in the academy, within corporations and pro-business organizations, and among large numbers of Americans through, for example, the 1980 PBS documentary series, Free to Choose, created and narrated by Friedman with his wife Rose.

The New Deal era lasted for 48 years, from 1933 until Reagan’s inauguration in 1981. The neoliberal era is now in its 40th year. Like any 40 year-old Oldsmobile, rust, cracks, and failing systems abound. Signs include: President Trump’s heretical war on trade, deficit-exploding tax cuts benefiting the wealthy and corporations, anger over “deaths of despair” tied to opioid and other addictions and economic distress, awareness and revulsion about rising levels of inequality across society, and spreading rejection of absolutist “shareholder capitalism.” Last August, the Business Roundtable reversed its 20-year old statement on the “Purpose of the Corporation” to abandon shareholder primacy as the only legitimate goal for corporate America.

But what about health care? Between 1980 and 2020, US health care spending rose far above US economic growth and spending levels in all other high-income nations, while growth in health insurance premiums and cost-sharing increased well beyond advances in household income. On key population health indicators, the United States performs worse than most nations (in some cases, the worst) on life expectancy, infant and maternal mortality, chronic disease mortality (e.g., diabetes), levels of overweight and obesity, suicides, and gun violence), and glaring systemic health inequities. Despite high spending and technological advances, Americans give their system among the lowest satisfaction ratings of any nation. Now with the still-unfolding adverse impact of the Covid-19 pandemic, the US health care system stands on a brink. Not a pretty 40-year track record, in spite of oversized capital investments and world-class salaries and profits.

Between 1965 and the 1980s, for the first time, we saw major infusions of investor capital into all corners of our health care system, courtesy of shareholder-owned for-profit companies who often cut long-lasting ties with local communities. Many welcomed this trend as the “right” medicine for what was recognized as an ailing system. In 1984, health care futurist Jeff Goldsmith described the unfolding transition from government controls to deregulated competitive markets as “the death of a paradigm.” Private markets had evolved to a stage, he argued, where they could better control rising health care costs than could government bureaucrats.

In 1986, the Institute of Medicine released a 600-page report on “For Profit Enterprise in Health Care.” Though the Commission documented extraordinary growth in for-profit enterprise across the system in 1965-1985 (with wide sector variations), they found no evidence to convict for-profits of “killing” health care, instead identifying pluses and minuses that called for closer monitoring.

Today, residents of the United States experience higher spending with worse outcomes and the lowest rate of health insurance coverage among high-income nations, even with gains from the Affordable Care Act. And the for-profit acceleration is not slowing. In fact, one of the fastest growing elements in the for-profit space is private equity, often described as “capitalism on steroids.” Most Americans don’t know it, but private equity firms are principally responsible for today’s scandal of “surprise medical billing.”

US health care tends to look inwards to find solutions to big problems within its own tight borders. Yet, looking outside the health care neighborhood may provide compelling insights and important answers.

Outside the health care circle, large segments of the American public want meaningful systemic change. A 2018 document from the William and Flora Hewlett Foundation, Beyond Neoliberalism is a clarion call for a new policy sphere that is forming in think tanks, academia, advocacy and activist organizations, and the legal community, including surprising allies from Republican/conservative quarters, such as Senator Marco Rubio (R-FL), who now publicly rejects the notion of shareholder primacy. The search is on for a new paradigm for American society. Depending on the outcomes of the November 3rd federal elections, this movement may find itself on a fast track to influence or a slow boat to who-knows-where.

Sometimes we’re like fish in a water-filled tank. Noticing the water can be tough because it’s everywhere. While other societies around the globe have vigorous debate over neoliberal policies in their midst, Americans are mostly unaware. To many, the notion that we still live in the Ronald Reagan era seems bizarre. And yet, here we are. As Maya Angelou wrote: “If you don’t know where you’ve come from, you don’t know where you’re going.” Victor Fuchs put it this way in his 2002 book, Who Shall Live?: “If change is to be for the better, it should be based on an understanding of why things are the way they are.”

US health care faces many challenges within its own space. Some of the biggest challenges, though, connect health care to larger American societal concerns, such as inequality and climate change. We’re all in this mess together, and we need to think and act that way more.

Lost in the ACA: Bit Parts in a Landmark Law

I wrote this article for the Journal of Health Policy, Politics and Law for their special edition on the 10th anniversary of the signing of the Affordable Care Act. You can access the full PDF by clicking here. You can view the full Table of Contents of the issue by clicking here. And here’s my abstract:

“The Affordable Care Act (ACA) is a mosaic across a spectrum of health policy domains. The law contains hundreds of smaller and mostly unnoticed reforms aimed at nearly every segment of American health policy. Ten years later, these pro-visions include successes, failures, and mixed bags, which should be considered in any full assessment of the ACA. This article examines 11 from each of these 3 categories, drawn from 9 of the ACA’s 10 titles. These mini-narratives deepen recognition that the ACA is our best example of comprehensive health reform and defies simplistic judgments.”

Shareholders, Stakeholders, and US Health Care

I haven’t had as much time to write as I would like because of other commitments. One of those commitments has been working on the Robert Wood Johnson Foundation’s Culture of Health program as it relates to the U.S. business community. That experience has deepened my interest in the corporate role in the health care space and the health care role in the business space. This new Milbank commentary outlines some of my interests. More to come, I hope. Please send your comments to: jmcdonough@hsph.harvard.edu

August 19, 2019 was a big day for The Business Roundtable (TBR), the Washington, DC non-profit association of chief executive officers of major US companies. The organization released a new “Statement on the Purpose of the Corporation” signed by 183 CEOs declaring that the interests of workers, customers, communities, and “other stakeholders” should be as important as the interests of a company’s shareholders.¹ This represented a significant change from its 1997 Statement that declared “the principal object of a business is to generate economic returns to its owners.”

While actions, not statements, will reveal real intent over time, this change was noteworthy—including for the US health care sector. The subject has deep roots in American society, especially in the advocacy of the late economist Milton Friedman, who derided corporate social responsibility as “fundamentally subversive” and asserted that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.”²

In the 1970s and 1980s, Friedman’s notion powered a movement in the United States, Great Britain, and around the globe called “neoliberalism” that promoted deregulation, defanged labor unions, shrunken government, and ever lower taxes. From business schools to high cathedrals of capitalism “greed is good” became more than a movie line from Wall Street and its iconic Gordon Gekko. Binyamin Applebaum’s new book, The Economists’ Hour, lays out the neoliberal narrative, warts and all, in compelling detail.

In recent years, polite rebellion has broken out in business circles against the presumption of shareholder primacy. In January 2019, BlackRock CEO Larry Fink, in an open letter to CEOs, asserted that companies that “fulfill their purpose and responsibilities to stakeholders reap rewards over the long term. Companies that ignore them stumble and fall.”³ Back in 2009, then-Microsoft CEO Bill Gates advocated for “creative capitalism” to confront societal needs, while business strategy guru Michael Porter introduced “shared value” into the business lexicon. Whole Foods CEO John Mackey has made hay with his attempted movement and 2013 book Conscious Capitalism.

Today, companies have many organizations, associations, and pathways with which to engage in societal improvement and stakeholder engagement. Environmental, social, and governance criteria (ESG) are the recognized set of standards by which companies are measured for social consciousness, among others.

What about US health care and this neoliberal era in which we still breathe? The connections are multiple, deep, and noteworthy. For starters, of the 183 CEO signers of the TBR statement, only 11 come from companies primarily embedded in the health sector, such as Pfizer, CVS Health, and Siemens, far less than a proportionate share of health care’s 18% jumbo slice of the US economy. And it is not difficult to view TBR’s statement as whitewash, especially when signers include CEOs of Johnson & Johnson and Mallinckrodt Pharmaceuticals, companies that are neck deep in the nation’s opioid marketing scandal.

Influential US political and economic historians refer to the period from the late 1970s through today as the “Reagan era,” crowned during the presidency of Ronald Reagan who declared in his inaugural address that “(i)n this present crisis, government is not the solution to our problem, government is the problem.” His term in office ushered in the modern era of tax cuts, growing inequality, wage stagnation, diminished unionization, and repeated assaults on government legitimacy. The “Neoliberal Era” may be a better fit. An important question is whether Donald Trump represents the end of this era or the start of something new.

Coincidentally or not, in the early 1980s US national health spending as a percent of gross domestic product (GDP) split from rates in other advanced nations toward its current extreme outlier status. US spending on health increased from about 8% of GDP in the late 1970s to 17.8% in 2017, far ahead of the nation with the second highest rate of national spending on health, Switzerland, at 12.2%.

In return for this massive societal investment in medical care, we have the world’s most technologically advanced health care system along with the highest prices in the world for any category of medical services or products one can imagine. The rush of private investment capital into our medical sector has resulted in cutting-edge medical care, advanced drugs and medical devices, and the highest salaries of any professionals in American society.

In these 40 years, we also have seen three consecutive years of declining life expectancy, a deep anomaly among our international peers, humiliating rates of infant and maternal mortality, shocking levels of gun violence, and extreme incidence of overweight and obesity. As economist John Komlos has documented, during World War II, native born Americans were the tallest among advanced nations, both men and women—we are now among the shortest.⁴ For good measure, Americans are also among the most dissatisfied with our health care system. For what it is worth, money doesn’t buy us good health or happiness.

In this epoch, we have seen enormous growth in private investor funding into a sector formerly dominated by nonprofits or government, in hospitals, physician practices, home health, hospice, air ambulances, and much more. The pharmaceutical industry has always been for-profit, yet its extraordinary concentration has ballooned its pricing structure. The for-profit health sector keeps evolving, assuming new forms. As Gondi and Song document, between 2010 and 2017 the value of private equity deals involving acquisition of health-related companies, mostly hospitals and physician practices, increased 187% reaching $42.6 billion.⁵

Could the investor dominance of much of US health care explain at least part of our outlier status on health spending and outcomes? It is hard to imagine that the investor-driven corporatization of American society could have left medical care untouched. Even today, the most common complaint from conservatives and Republicans about US health care is that government regulation thwarts the free market.

The notion that we could put this massive bulk of toothpaste back into the tube seems preposterous. The economic and political power of the incumbent system would easily stymie any serious challenge, including the apparent one, a nationalized “Medicare for All” structure. Assuming anything of this magnitude could get through Congress—or the Supreme Court—is a daunting stretch. And yet, the real frustrations of Americans with a system organized first and foremost to serve money and power before patients deserve attention.

If, as the Business Roundtable advocates, we are embarking on a new national conversation concerning the role of the for-profit corporation in American society, perhaps we should also instigate a parallel and sustained national examination and conversation about the history, experience, and results from for-profit corporatization of our health and medical care sector. It is clear that this revolution produces good and bad results for American society and for the world. Is it time for a reckoning?

References

The Business Roundtable. Statement on the Purpose of the Corporation. Washington, DC. August 19, 2019. https://opportunity.businessroundtable.org/wp-content/uploads/2019/09/BRT-Statement-on-the-Purpose-of-a-Corporation-with-Signatures.pdf. Accessed October 30, 2019.
Friedman M. The social responsibility of business is to increase its profits. New York Times Magazine. September 13, 1970.
Fink L. Larry Fink’s 2019 letter to CEOs: profit and purpose. BlackRock. January 2019. https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter. Accessed October 30, 2019.
Komlos J, Buar M. From the tallest to (one of) the fattest: the enigmatic fate of the American population in the 20th century. Economics and Human Biology. 2004;2:57-74.
Gondi S, Song Z. Potential implications of private equity investments in health care delivery. JAMA. 2019;321(11):1047-1058.

Published in 2019
DOI: 10.1111/1468-0009.12432

Case Studies in Medicare for All

[I wrote this new commentary, “Case Studies in Medicare for All,” for the Milbank Quarterly.]

George Santayana’s famous quote—“Those who cannot remember the past are condemned to repeat it”—comes to mind when considering prospects for a “Medicare for All” or single-payer health system revolution. There is history here demanding attention that goes beyond President Harry Truman’s ill-fated effort in the late 1940s. Since 1994, four states have taken a cold, hard, and serious look at single payer and backed off, three via voter ballot initiatives and one by legislation. Collectively, they offer a compelling “starter’s package” of case studies on Medicare for All. Let’s take a closer look at each and then consider the patterns.

California Here We Don’t Come, 1994. Voters rejected Proposition 186—the California Health Security Act—by 73% to 27%. The initiative appeared on the November 1994 ballot only two months after the final and ignominious death of Bill and Hillary Clinton’s health reform plan. Throughout 1993-1994, single-payer advocates preached that Democrats were squandering a historic opportunity by advancing the Clinton’s complicated and indecipherable proposal instead of moving single-payer legislation. The California initiative would have been financed by new taxes on employers, individuals, and tobacco products. A diverse group of “good guy” proponents had enough organizational heft to collect more than one million signatures statewide to qualify for the ballot. Continue reading “Case Studies in Medicare for All”

The Secret Weapon behind State Medicaid Expansions

This post appeared in the Health Affairs Blog on March 29, 2019: “The Fairness Project: A New Kid on the Block’s Role in Voter Driven Medicaid Expansions.”

One surprising outcome from the November 2018 mid-term elections was voter approval of ballot initiatives expanding Medicaid coverage in Idaho, Nebraska, and Utah. These victories were preceded by a similarly successful ballot initiative in Maine in November 2017. In three of the four states (not including Nebraska), Republican leaders have attempted to thwart the will of voters by undermining or negating the initiative wins. In the process, the issue of Medicaid expansion as permitted under the Affordable Care Act (ACA) has become reinvigorated.

Unknown by most is that a relatively new and ambitious national organization called The Fairness Project was key to these significant health access victories in all four states. The Fairness Project’s background story is compelling, as are on-the-ground stories of the roles it played in each state. The Fairness Project also bears watching because as many as 14 state governments still are unwilling to expand Medicaid as authorized by the ACA in the next two years. Six of those states allow citizens to advance policy initiatives to the ballot, including Florida and Missouri. Planning for 2020 is already well underway.

The inspiration for The Fairness Project came in 2014 from Dave Regan, president of the labor union Service Employees International Union-United Healthcare Workers West (SEIU-UHW). Regan wrote a widely distributed letter suggesting that organized labor was squandering power and influence by focusing heavily on collective bargaining while ignoring the economic needs of tens of millions of unorganized lower-income workers. As a Californian, he had seen firsthand how citizen ballot initiatives can achieve wins outside of traditional paths to power. The Fairness Project launched in 2015 with support from the SEIU-UHW.

An Impressive History

Between 2016 and 2018, The Fairness Project played a key role in winning ballot initiatives to mandate minimum wage increases in Arizona, Arkansas, Colorado, Maine, Missouri, and Washington State. In California, the District of Columbia, and Massachusetts, The Fairness Project ballot initiative efforts triggered legislatively mandated minimum wage increases without going to the voters. In the same period, The Fairness Project won ballot initiatives to mandate paid sick leave in Arizona, Michigan, Washington State, and San Antonio, Texas, and to cap payday loan interest rates in Colorado.

And then there is Medicaid for low-income uninsured Americans. By 2019, The Fairness Project’s four Medicaid wins opened doors for expanded coverage for a total of 405,000 uninsured low-income individuals in Idaho (90,000), Maine (70,000), Nebraska (90,000), and Utah (155,000). (Utah lawmakers scaled back the voter-approved expansion—although as detailed below, The Fairness Project helped reduce the legislation’s damage to expansion efforts—while efforts to undo the voters’ decision failed in the Idaho legislature.) The Fairness Project also got involved in the unsuccessful 2018 ballot campaign in Montana to raise tobacco taxes by $2 per pack to permanently finance that state’s Medicaid expansion implemented in 2015. The Montana expansion is likely to survive beyond its initial 2019 authorization, although with a different financing source than tobacco taxes. (See Exhibit 1 for state details.)

Exhibit 1: State Medicaid Expansion Ballot Initiatives 2017–18, Vote Totals And Financing

Source: Ballotpedia.

The Fairness Project’s Methods

The Fairness Project’s executive director is Jonathan Schleifer, former chief policy officer for Iraq and Afghanistan Veterans of America and former executive director of Educators for Excellence in New York. Since 2016, his seven-person team has learned many lessons about winning ballot initiatives.

Most important is the need for early and significant investments in professional polling, policy and legal research, and signature collection. “Most ballot initiative campaigns are underfunded and under-resourced, especially at the beginning, and most funders don’t want to invest in the early and crucial incubation period,” he observes. “Campaigns get bled during signature collection and then lack resources to win. We make early risky investments in incubation work, research, coalition building, grassroots/grasstops organizing, and signature collection.”

The Fairness Project works with local activists and groups to build professional campaign websites, exploit social media, raise local and national funding, hire staff, ensure that polling is rigorous and honest, and ride “shotgun” with state-based partners for the campaign’s duration. As of 2018, its track record is an impressive 16 wins and 1 loss; its minimum wage increases have put an estimated $7 billion into low-income workers’ pockets.

Maria Weeg, who served as general consultant to Idaho’s campaign, saw The Fairness Project as a helpful bridge between the long-time and legislatively focused “Close the Gap Coalition” and the newer “Reclaim Idaho” grassroots movement. “The Fairness Project provided another voice in the room, much-needed resources, cutting-edge data, and facilitation to bring the two groups together.” In the end, the campaign raised $1.77 million, half from instate sources and half from The Fairness Project’s national donor base. Two weeks before Election Day, the campaign secured a public endorsement from outgoing Republican Governor Butch Otter, who had opposed Medicaid expansion up to then.

RyLee Curtis managed the “Utah Decides Healthcare” campaign. “We could not have found someone in Utah who knew how to run at this level,” she concludes. Unlike in Nebraska and Idaho, the Utah initiative included a funding mechanism through a modest 0.15 sales tax hike; opponents exploited this to reduce the final “yes” vote to 53 percent from pre-election polling estimates around 60 percent. Most of the $3.8 million raised in support—except for about $300,000 raised locally—came from The Fairness Project. “This was a blessing,” says Curtis. “We would never have had the money and resources to make this happen without their help along with our countless volunteers.”

The Fairness Project’s effectiveness continued in all three states after the November wins, helping state groups to organize to defend their victories. In Utah, the state Senate had passed a watered-down version that requires a federal Medicaid waiver and specified that if federal approval were not provided, no expansion would happen, negating the entire voter initiative. Local groups descended on the state House of Representatives and won a vital change—signed by Governor Gary Herbert (R)—that if a federal waiver is not approved, the original initiative will be implemented as written.

Unsurprisingly, financing is a challenge. In Montana, the $2 tobacco tax proposal drew $18 million in opposition spending from that industry. The inclusion of sales tax funding in Utah’s plan reduced their expected margin of victory. On the other hand, lack of financing in the 2017 Maine initiative gave then-Governor Paul LePage (R) the argument to stall implementation until his departure 14 months later. Given these experiences, articulating a generalized financing theory is challenging. It will be case by case for the time being.

The Road Ahead

Going forward, The Fairness Project will continue its minimum wage, paid sick leave, and other campaigns to help disadvantaged workers. It also intends to keep working on state Medicaid expansions. Only six of the remaining 14 non-Medicaid expansion states allow citizen ballot initiatives: Florida, Mississippi, Missouri, Oklahoma, South Dakota, and Wyoming. The jewel of these is Florida with as many as 1.25 million potential Medicaid enrollees, including many recent exiles from Puerto Rico. However, the only feasible pathway to voter-driven expansion in Florida requires a constitutional amendment that carries a high voter signature threshold and a required 60 percent voter approval margin; the Sunshine State also has one of the nation’s more expensive media markets. Moreover, lawmakers in Florida and Missouri as well are even now contemplating how to make the ballot requirements even more onerous.

More than a few savvy health policy leaders demurred in supporting The Fairness Project’s Medicaid campaigns in 2017 and 2018. The Project’s leaders, undeterred, saw opportunity where others only saw risks and downsides. As Marcel Proust wrote: “The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.” Schleifer and colleagues’ new eyes have helped to transform the nation’s political landscape regarding Medicaid. Here’s hoping that they keep looking.

The Health Reformers’ Dilemma

[The Milbank Quarterly just published this new commentary that I wrote for their November 2018 edition.]

Ever since the US Supreme Court ruled in 2012 that the expansion of Medicaid as required by the Affordable Care Act (ACA) must be optional rather than mandatory for states, health care advocates have worked heart and soul to convince their state governments to adopt the expansion. For Virginians, the moment arrived in 2018 after years of frustration—with a catch. The only politically viable pathway to expansion included a detested provision, known as the “work requirement,” that obligates many new enrollees to work or else forfeit coverage. What to do?

I explored this dilemma with health justice advocates in Virginia, the first state to confront work requirements that had not previously expanded Medicaid. In November 2017, Virginia voters elected a respected new Democratic governor named Ralph Northam along with an eye-popping jump in the number of Democrats in the state’s House of Delegates, leaving them just 2 votes shy of majorities in the House and Senate. In May 2018, solid bipartisan majorities formed to enact Medicaid expansion after years of discouraging defeats. The wrinkle was including a work requirement and imposing cost sharing on Medicaid beneficiaries. Continue reading “The Health Reformers’ Dilemma”

Might We See a Medicaid Wave Start Next Week?

[This column appeared on the Health Affairs blog on Thursday, November 1.]

Ever since the U.S. Supreme Court ruled in 2012 that states must have an option whether or not to expand Medicaid as authorized in the Affordable Care Act, expansion has been a long, slow slog, state by state, inch by inch. While blue states had mostly lined up to expand Medicaid by 2013, nearly every purple and red state proved to be a battlefield. Today, 19 states have yet to expand, with 31 in the “yes” column (plus the District of Columbia) (see table 1). The last state to expand, #31, was Louisiana in mid-2016. But, might a mighty Medicaid wave be coming courtesy of the November 6^th elections? The answer is a definite maybe.

Right now, all that’s certain is that Virginia will become state #32 to expand Medicaid in January. The state enacted the 400,000-person expansion last May, albeit with a “work requirement” to be filed with the Centers for Medicare and Medicaid Services (CMS) sometime in 2019.

Maine is certain to become #33 early next year if Democratic Attorney General Janet Mills wins the Governor’s Chair. In November 2017, Maine voters approved expansion—59-41 percent—in a state ballot initiative. Departing Republican Governor Paul LePage refused to implement the expansion in spite of strong legislative support to do so, as well as an order from Maine’s highest court. In previous years, the Legislature failed by only a small number of votes to override LePage’s vetoes (5 times). Progressive forces expect to pick up state legislative seats on November 6^th, so it’s also possible expansion could happen with a new Republican governor, supportive or not.

State Adoption Of ACA Medicaid Expansion (By Year)

SOURCE: Advisory Board. “Where the States Stand on Medicaid Expansion.” June 8 2018. Accessed Oct. 29 2018 at: https://www.advisory.com/daily-briefing/resources/primers/medicaidmap

Medicaid On the Ballot

Activists in three states—Idaho, Nebraska, and Utah—are standing in the wings hoping to be states #34, 35, and 36 depending on the outcomes of state ballot initiatives in each of them on November 6^th. Montana has an initiative on the ballot to continue its expansion with dedicated funding.

While Idaho’s departing Governor Butch Otter fought consistently against Medicaid expansion throughout his tenure, he recently changed his position and announced his support for the Medicaid ballot initiative. Republican gubernatorial candidate Brad Little says he will respect the ballot initiative’s outcome—even though the measure does not specify how to finance the 10 percent financing match states will need to pay by 2020 (7 percent in 2019). Two organizations, Idahoans for Healthcare and Reclaim Idaho raised $594,191 by the late September reporting deadline, while the opposition Work, Not ObamaCare has raised $29,999. Idaho’s Hospital and Medical Associations contributed nearly $200,000 to the “yes” effort. Recent polling shows 66 percent support, including 77 percent from independents and 53 percent from Republicans. The yes campaign co-chair is Republican State Representative Christy Perry.

Nebraska previously did not have enough support to overturn a Governor’s veto against expansion. Nebraska Governor Pete Rickets maintains his opposition as he coasts toward an easy re-election. But it’s a spirited race for Nebraska Initiative 427, the Medicaid Expansion Initiative that would cover an estimated 90,000 low-income Nebraskans. The lead organization—Insure the Good Life—has raised $1.69 million as of late September to support a yes vote, versus $0 by the opposition Americans for Prosperity. The “yes” camp’s largest contributor is a national progressive political action committee called the “Fairness Project” which also backed the 2017 Maine Medicaid initiative and which has donated $1.19 million. Other key supporters include the Nebraska Hospital Association, the state health center association, Nebraska AARP and 24 other organizations.

Of the three ballot initiative campaigns, Utah’s is the most compelling. Proposition 3 would raise the state’s sale tax from 4.70 to 4.85 percent to fully finance the expansion for 150,000 low-income Utah residents. In 2021, that is projected to raise $88 million to cover the state’s projected $78 million share of the $846 million total expansion cost (the federal government pays the rest). A February 2018 poll showed 68 percent support among Utah voters. As in Nebraska, the national Fairness Project is driving the campaign, providing $2.7 of the $2.83 million raised as of late September. A wide array of health care and religious organizations are public supporters. No organization is registered with the state in public opposition to the initiative, as of late September.

To thwart the proposal, in March, Governor Gary Herbert signed House Bill 472 into law to expand Medicaid for individuals with household incomes no higher than 95 percent of the federal poverty line, as opposed to 138 percent in Proposition 3, as authorized under the ACA. HB472 would also impose work requirements on many enrollees and would cover 90,000 as opposed to the initiative’s 150,000. Earlier this year, the Trump Administration rejected a plan similar to HB472 that was advanced by Oklahoma to expand Medicaid eligibility no higher than 100 percent of the federal poverty level. So it is unclear whether the Trump Administration will allow the Utah HB472 expansion to go forward.

Montana is another state with a Medicaid expansion ballot initiative facing the voters on November 6^th, but to continue the existing expansion. The state expanded Medicaid in 2015, though only through 2019. The November 6^th ballot will present an initiative, I-185, to continue expansion past 2019 by raising tobacco taxes by $2 a pack as the state’s funding source. Healthy Montana for I-185 backers have raised $4.8 million and are battling the tobacco industry in the form of Montanans Against Tax Hikes (MATH) which has invested at least $12 million to defeat the initiative; 97 percent of the MATH’s money has come from Altria Client Services, maker of Marlboro cigarettes and other smoking products. If voters approve, the expansion will continue without restraints. If the referendum fails, the legislature still could pass a new funding law, likely with a work requirement attached.

Other Election Day Impacts

Of the 14 remaining non-expansion states, the November 6^th results may have consequential impact. If Democratic candidates win currently competitive gubernatorial races in Florida, Georgia, Kansas, and Wisconsin, and pick up legislative seats, that could alter the Medicaid expansion equation. This would be especially true in Kansas where prior expansion efforts were thwarted by a narrow inability to override gubernatorial vetoes by only three votes. In other states, notably North Carolina with Democratic Governor Roy Cooper, significant Democratic gains in the state legislature may also have a consequential impact.

Some noteworthy features of this issue are worth considering. First, in many of these remaining states with Republican control, the price of expansion is likely to include work requirements on many newly eligible enrollees—as occurred in Virginia this past year. Unless ruled illegal by the federal courts, this national experiment will more than likely run at least for the duration of Republican control of the executive branch. As is apparent from the track record in Arkansas thus far, this is about values and ideology more than dollars and sense.

Second, after six years of fighting the Medicaid expansion wars, it is clear that most expansion opponents are not going to change their minds. Not much is left to say that hasn’t been said countless times before. As we saw in Virginia, a change of mind accompanies a change in occupants of legislative and gubernatorial seats. And in the four November 6^th ballot initiative states, if successful, we should anticipate that one or more of the affected Governors may imitate Maine Governor LePage in seeking to block expansion in spite of voter sentiment.

Third, in spite of all the uproar, it is significant that not one expansion state has gone back on it, or even considered doing so. The closest an expansion came to a rollback was the election of hard right conservative Matt Bevin as Kentucky’s governor in 2015. Bevin abandoned his pledge to repeal Kentucky’s ground-breaking and successful Medicaid expansion early in his gubernatorial campaign, and never returned to that stance, turning to mandatory work requirements as the next best thing.

Much like how the public’s support for banning pre-existing condition exclusions has become calcified in the public’s mind from the battles of 2017 and 2018, similarly the expansion of Medicaid has become hard-wired into public consciousness in the states that adopted it.

I have yet to read an insider’s account on how and why the U.S. Supreme Court lined up 7 votes to secure their atrocious 2012 ruling to make Medicaid expansion an option for states. It is true that their decision played a role in compelling Americans to grapple with and understand the rationale and importance for Medicaid expansion. But at what a damn price!

Continue reading “Might We See a Medicaid Wave Start Next Week?”

Why a “No” Vote on Question 1 on Nurse Staffing Ratios

[I co-wrote this opinion column with Paul Hattis for Commonwealth Magazine.]

SHOULD MASSACHUSETTS establish mandated nurse-to-patient ratios in law for all the state’s acute care hospitals? This 25-year-old conflict between the Massachusetts Nurses Association and Massachusetts Hospital Association will be determined at the polls on November 6 as Question 1.

We think not.

We are university professors who care about Massachusetts health care policy. We both connect with Massachusetts’ leading health care consumer advocacy organizations who worry about access, cost, and quality in Massachusetts’ health care system—and we don’t speak for them.

We have advocated publicly for better pay, working conditions, and training for health care workers in hospitals and nursing homes. We know the vital importance of organized labor as representatives of health care workers to meet their needs and to promote a higher quality care for patients. We are not eager to take a position opposed to the Massachusetts Nursing Association.

After seeing data advanced by groups on both sides, especially data and analysis from the Massachusetts Health Policy Commission, we believe the evidence, the better policy choice, and the more socially just result—especially for lower income households and communities—points to a no vote. The Legislature should demand that both sides come together to create a more workable set of solutions to improve quality of care in our state’s hospitals. Continue reading “Why a “No” Vote on Question 1 on Nurse Staffing Ratios”

What Does the Beth Israel/Lahey Health Merger Tell Us?

FOR THE BETTER part of this decade, Massachusetts had been on a roll regarding its health system’s performance. Since passage of the 2006 universal health insurance law, we’ve been tops in having the lowest number of uninsured the nation. Recent national surveys on cost, quality, access, and public health from the Commonwealth Fund, the United Health Care Foundation and others show the Bay State to be best or among them. As Michael Widmer noted in his October 7 Upload piece, over the past five or so years, even the state’s performance on controlling costs has also been a national standout.

Still, history teaches that these trends can turn downward on a dime. And self-congratulations can obscure lingering and insidious system weaknesses. The current controversy over the proposed merger of Beth Israel Deaconess Medical Center, Lahey Health, and other hospitals and physician organizations into “Beth Israel Lahey Health” (BILH) brings into sharp relief underlying systemic problems that are getting worse, not better.

Last week, the state’s Health Policy Commission released its final analysis of the cost, quality, and access impacts of the merger. They estimate $158.2 to $230.5 million in added annual costs above current projections from this deal. Also last week, the health commission reported on the projected annual costs of Question 1, the November Massachusetts ballot initiative that would set statutory nurse-patient ratios in all acute care hospitals – estimating $679 to $949 million in new annual costs in our $61.1 billion state health system. Continue reading “What Does the Beth Israel/Lahey Health Merger Tell Us?”