National Health Policy

Health Reform Realism

[I wrote this new commentary for the Milbank Quarterly.]

In noticeable ways our current health reform period resembles the 2005-2006 era when political leaders, stakeholders, and think tanks began formulating proposals to prepare for a future national effort to achieve comprehensive health reform, a process that came to fruition with the signing of the Affordable Care Act (ACA) in March 2010. Though those years were also a time of unitary Republican control of the White House and both houses of Congress, many foresaw the arrival of a new president and Congress in 2009 as a potential and not-to-be-missed window of opportunity for important reform. Waiting until 2009 to begin planning would have been too late. I propose that in 2018 we embrace this renewed possibility for reform with realism and humility.

Today, we already see a plethora of legislative and policy proposals emerging from elected Democratic officials and progressive think tanks such as the Urban Institute and the Center for American Progress. While Sen. Bernie Sanders’s Medicare for All bill seeks the holy grail of single-payer reconstruction, others aim for meaningful yet incremental changes to address critical pain points in the current system.

All of these plans rely on an unreliable expectation that, come January 2021, Democrats will control the White House and governing majorities in the US Senate and House of Representatives, as the federal election cycles of 2018 and 2020 come to resemble the blue-wave cycles of 2006 and 2008. All of these plans recognize little potential for meaningful reform until then. However, if Democrats control all 3 power sources come January 2021, public demands on them for far-reaching national health reform may well be overpowering. Continue reading “Health Reform Realism”

Revisiting the Land of the Individual Mandate

[This new commentary was just published by the Milbank Quarterly.]

The years 2013 through 2016 were excruciating for the Massachusetts Health Connector. In 2013, the Connector was among the nation’s most troubled federal/state health insurance exchanges, as it endured an epic collapse of its new website to help consumers purchase individual health insurance. Since then, it has taken a step-by-step and low-key “no news is good news” approach to rebuilding trust and credibility with its 252,000 clients.

Now the silent period is ending. In 2006, Massachusetts was the first and only state to enact an individual health insurance mandate, the essential model for the federal individual mandate included in the Affordable Care Act (ACA) in 2010 and implemented in 2014. In last December’s Tax Cuts and Jobs Act, President Trump and Congress neutered the ACA mandate by reducing the financial penalty to 0. Despite widespread reports to the contrary, the mandate was not repealed, and the law, with its mandatory reporting requirements, remains on the books.

Thus, Massachusetts now returns to the spotlight as the nation prepares to examine the impact of the federal action, testing 1 state’s experience against that of the other 49. In 2015, the last year for which tax data is publicly available, only 3% of adult tax filers in Massachusetts reported not having insurance meeting state standards, corroborating other data sources indicating that it has the lowest rate of uninsurance in any state (the most recent US Census data shows Massachusetts at 97.5% coverage). Depending on an uninsured person’s household income, the monetary penalty ranges between $21 and $96 for each month without coverage. As of early February, at least 9 other Democratic-leaning states are considering adopting a similar mandate. Continue reading “Revisiting the Land of the Individual Mandate”

Looking Back on the Desegregation of U.S. Hospitals in 1966

[Last summer, I wrote the following review of The Power to Heal: Civil Rights, Medicare, and the Struggle to Transform America’s Health Care System by David Barton Smith. The review just came out in The Common Reader. I still think the book is required reading in our times. And I love the cartoon!]

On a Saturday morning in January 1967 Dr. Jean Cowsert, an African-American physician, was found shot to death in front of her home in Mobile, Alabama, after a stone had been thrown through her front window and she went out to investigate. Though police concluded that she had accidentally shot herself, in the months prior to her death she had been a key confidential informant to officials from the U.S. Department of Health, Education and Welfare (HEW) concerning the Mobile Infirmary’s publicized efforts to thwart patient desegregation of its facilities. A HEW official’s carelessness may have inadvertently disclosed her identity to desegregation opponents.

Dr. Cowsert’s is one of many compelling stories in David Barton Smith’s powerful account of U.S. hospital desegregation in 1966, triggered by the convergence of national civil rights mobilization, the 1964 Civil Rights Act and the 1965 enactment of Medicare. In The Power to Heal: Civil Rights, Medicare, and the Struggle to Transform America’s Health Care System Smith tells how federal health officials—with backing from President Lyndon Johnson, HEW Secretary John Gardner, and other federal officials—mobilized to achieve a startlingly rapid transformation of America’s hospitals, erasing the stain of racial segregation that had always prevailed across the nation, North, South, East, and West.

Smith’s account stands in vivid contrast to the equally compelling and failed story of American public school desegregation, best told in the 1976 Pulitzer Prize-winning Simple Justice: The History of Brown vs. Board of Education and Black America’s Struggle for Equality by Richard Kluger. In that case, the 30-year struggle to overturn “separate but equal” racial segregation in public education, culminating in a landmark 1954 U.S. Supreme Court’s 9-0 decision in Brown v. Board of Education, to this day has been mostly unachieved. A bold court decision was fatally undermined by a subsequent enforcement ruling committing the nation to an unsuccessful implementation strategy called “with all deliberate speed.” The contrast between successful desegregation of U.S. hospitals versus failed desegregation in public education is instructive.

Smith writes: “In four months, civil rights activists … transformed the nation’s hospitals from our most racially and economically segregated institutions to our most integrated. In four years, they changed patterns of use of health services that had persisted for half a century. The fundamental moral imperative—that those needing medical care should receive it—began for the first time to reflect actual use of services. A profound transformation, now taken for granted, happened almost overnight.”

A bold court decision was fatally undermined by a subsequent enforcement ruling committing the nation to an unsuccessful implementation strategy called “with all deliberate speed.” The contrast between successful desegregation of U.S. hospitals versus failed desegregation in public education is instructive.

As with so many aspects of American society prior to the 1960s, segregation ruled. A 1952 report by the South Conference Education Fund titled “The Untouchables: The Meaning of Segregation in Hospitals” documented 12 deaths of African Americans denied admission to white-only hospitals governed by white physicians and white dominated medical associations. In most of the nation, black-only hospitals were under-staffed, under-financed, and under-equipped.

Beginning in the 1940s, black health professionals who were systematically excluded from the white medical mainstream, supplied backbone in the struggle for civil rights in hospitals, in schools and across American society. Theodore Roosevelt Mason Howard, MD, Sonnie Wellington Hereford III MD, Reginald Hawkins DDS, W Montague Cobb MD PhD, Charles Watts MD, George Simkins Jr. DDS—these are long-forgotten names of physicians who stood up for justice in their communities and in courts.

Though the 1946 Hill-Burton Act banned racial discrimination in new and expanded hospitals for which it provided ample federal funds, the law explicitly sanctioned “separate but equal” facilities. A 1962 federal lawsuit, Simkins vs. Moses Cone, attacked the constitutionality of that provision, winning crucial support from the Kennedy Administration, and upheld by the U.S. Supreme Court in March 1964 just as Congress was passing that year’s landmark Civil Rights Act. That law’s Title VI, for the first time, prohibited using federal funds for racial segregation.

Passage of the bold 1964 law, though, was insufficient to compel hospital desegregation. The critical catalyst was the passage of Medicare in July 1965 providing many millions of dollars in payment for medical services for senior citizens for the first time. Though Title VI clearly applied, its remedies and enforcement powers were meager. The question became: Would President Lyndon Johnson enforce Title VI compliance in Medicare by blocking payments to racially segregated hospitals? An initial push for voluntary desegregation failed as surveys conducted by civil rights activists had proven in mid-1965.

With only six months until the July 1, 1966, inauguration of Medicare, “Gardner was launching perhaps the riskiest domestic policy initiative in the nation’s history. It tied together the fate of Johnson’s two signature pieces of legislation—the Civil Rights Act and Medicare,” Smith writes.

In December 1965, HEW Secretary Gardner distributed a memo declaring that Medicare compliance with Title VI “is too important to be treated as anything less than the highest of priorities in our total program,” committing staff and resources to the task. With only six months until the July 1, 1966, inauguration of Medicare, “Gardner was launching perhaps the riskiest domestic policy initiative in the nation’s history. It tied together the fate of Johnson’s two signature pieces of legislation—the Civil Rights Act and Medicare,” Smith writes.

Gardner’s team quickly concluded that success would require “no ‘all deliberate speed’ pass for hospitals wishing Medicare funds. No money should go to any facility where race played any role in the treatment of patients, employees, or medical staffs.” Compliance was handed to HEW’s Public Health Service managed by U.S. Surgeon General William H. Stewart and the new HEW Office of Equal Health Opportunity. But with months before Medicare’s rollout and more than 4,000 noncompliant hospitals, how could they achieve this seemingly impossible task?

When HEW leaders put out a call for volunteer temporary federal employee transfers to perform compliance, more than 1,000 employees, mostly from the Social Security Administration and the Public Health Service, answered yes. They included “bench scientists from NIH, veterinarians, pharmacists, managers of Social Security field offices, venereal disease investigators, even a ‘medical officer from the Indian Health Service complete with an Eskimo secretary.’”

The challenges were daunting. A January 1966 review concluded that at least two-thirds of Southern and border state hospitals were out of compliance, while many Northern hospitals operated as de facto segregated facilities. On March 4, 1966, Surgeon General Stewart sent a letter to all U.S. hospitals with this message: “To be eligible to receive Federal assistance or participate in any federally-assisted program a hospital must be in compliance with Title VI … Representatives from the Department of Health Education and Welfare Regional office will be visiting hospitals on a routing periodic basis …” Three weeks later, Dr. Martin Luther King offered his historic judgment: “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”

Smith provides many anecdotes of intransigent hospital officials who tried to hoodwink inspectors, concluding that “the vast majority of the hospitals chose to comply in order to get the Medicare payments, and it was remarkable how fast and dramatic the changes were.” Literally overnight, the blood supply from the Louisiana Red Cross Blood Bank, previously labeled “white” and “colored,” was integrated. At a June 15 White House meeting with hospital officials, President Johnson declared: “The federal government is not going to retreat from its clear responsibility … and I hope that you will not retreat either.” By June 15, more than 80 percent of hospitals were complying, and by June 30, the number had risen to 94 percent. “By January 1967,” Smith reports, “the mopping up, with only a few exceptions, had been completed.”

Not all changes were welcome. According to Smith, “within two decades of the implementation of Medicare, all but four of the more than 400 20^th century historically black hospitals had closed or converted to other purposes.” The Office of Equal Health Opportunity was disbanded by President Richard Nixon. And the problems of racial and ethnic inequities and disparities in health and health care are enduring national concerns.

Still, the rapid and effective desegregation of U.S. hospitals is one of our nation’s—and our health care system’s—shining moments. Smith’s book is the authoritative source to understand the political, social, economic, and cultural context of this transformation. Perhaps as monuments to Confederate generals are demolished, we might find space for a monument to Dr. Jean Cowsert.

Mad About States

[This column was just published on the website of the Milbank Quarterly.]

A consistent theme in 2017 Republican Congressional efforts to repeal and replace the Affordable Care Act (ACA) was the intent to empower the 50 states to use federal funds to reengineer their Medicaid and individual health insurance markets as they see fit. If yet another Republican attempt at ACA repeal and replace happens in 2018, the most likely vehicle will be a reformulated Graham-Cassidy bill, the final 2017 repeal effort in the US Senate that featured far-reaching devolution to states. The idealization of states as the best makers of health policy is a myth worth busting.

States, goes the thinking, are closer to the people than those who govern from Washington, DC, more attuned to real-world preferences and values than feds. States are nimbler, better at adjusting and innovating than the plodding feds. States are, in the high-minded and oft-repeated words of late Supreme Court Justice Louis Brandeis, “the laboratories of democracy.”

As Republican Senator Bill Cassidy (R-LA) wrote in the Washington Post this past July, “Returning the decision-making power to the states is not a Republican plan or a Democratic plan, but an American plan that reflects the faith in states held by our Founding Fathers.”¹

As someone who has labored for decades in the vineyards of state health policy, I reply, nonsense. I give states their due. Massachusetts, for example, provided the inspiration for both the 1997 Children’s Health Insurance Program (CHIP) and the 2010 private health insurance reforms in title 1 of the ACA. Democratic and Republican leaders there and in many other states have forged successful bipartisan approaches to some of America’s thorniest health challenges. Yet the notion that states have innate wisdom and a tighter finger on the pulse of the people always superior to the federal government is not true. One example will do. Continue reading “Mad About States”

Pray for the Dead and Fight like Hell for the Living.

[The Washington Post’s Health 202 Column offered a set of “eulogies” on the fate of the ACA’s individual mandate — the mandate penalty was reduced to zero by the Republican’s newly approved tax-cut legislation. I had the last word…]

… So it’s not shocking that’s the part of Obamacare they chose to target in their tax overhaul, especially since their chance at a health-care bill seems to have passed. Democrats and advocates for the ACA have known for a while this was likely coming down the pipeline – and there was not much they could do to stop it.

Yet Republicans have talked for so long about repealing the mandate, election cycle after election cycle, it’s still hard to believe we’re actually standing here.

The Health 202 asked leading health-care wonks — on the right as well as the left – to offer some parting comments. Let’s call a eulogy of sorts.

–Andy Slavitt, former Centers for Medicare and Medicaid Services administrator under Obama: “The main effect of Republicans’ action today is to raise the cost of insurance for middle class families. The law has proven to be highly resilient and actions against it look increasingly petty. As a larger matter, to Republicans’ chagrin, they have now removed the only unpopular feature of the ACA. The rest of it enjoys overwhelming popular bipartisan support and will be much harder to remove.”

–Chris Jennings, former health-policy advisor to Obama: “Not overly original, but true: You break it, you own it and all the associated increases in premiums, out-of-pocket costs and uninsured Americans. Congratulations.”

–Jim Capretta, former Office of Management and Budget health-care director under George W. Bush: “There’s some exaggeration on both sides of the debate about the individual mandate. Advocates of the mandate say that its repeal will devastate the individual market. There’s not much evidence for this view. On the other hand, opponents of the mandate sometimes say its repeal will have no effect at all. That’s also not true.

“The individual market under the ACA is already somewhat unstable, and is suffering from an elevated level of adverse selection. The repeal of the mandate is going to make this not-so-great situation slightly worse. But the market is unlikely to collapse, as the ACA subsidies are sufficient to induce significant enrollment even without the mandate. Republicans now have some responsibility for the functioning of the marketplaces. Unfortunately, it does not seem like GOP leaders in Congress or the Trump administration have a clear idea of what they would like to do once the mandate is repealed.”

–Tom Scully, CMS administrator under George W. Bush: “I don t think the mandate ‘repeal’ will make a big difference. A Trump IRS was not going to enforce the penalties anyway. I am sure that insurers would prefer that it stay in place, but I bet he real behavioral impact will be minimal.”

–Newt Gingrich, former GOP House speaker (who once supported the idea of an insurance mandate): “A bad idea passed in a bad way and repealed in a classic American model of clumsy but correct.”

–John McDonough, Harvard health-policy professor: “As Mark Twain is reported to have said on May 31, 1897, ‘the report of my death was an exaggeration.’ The legislation reduces the penalty for non-compliance with the mandate to zero. The legal requirement remains intact.

“This is not trivial. It will not take long for the damage from the zeroing out of the ACA penalty to become clear. Because Massachusetts still has an enforceable mandate — and penalty — on its books, we will have speedy evidence of the impact of this policy change.

“In 2019 or 2021, a future Congress that cares about the stability and workability of the nation’s individual health insurance market, unlike the current Congress, will revisit this policy and likely re-establish a workable new policy.”

The Republican Tax Cut’s Silver Linings Playbook

[I’ve been super busy this fall and unable to keep up with writing about the ACA. I’m back in the saddle and here I go again. This commentary was just published on the Commonwealth Magazine website.]

A CORE TENET of behavioral economics is that most of us are biased toward optimism. I plead guilty. Today’s Exhibit A of my optimism bias is the Republican federal tax cut legislation heading toward the desk of President Trump for his signature.

It is true that the tax cut legislation is rigged to disproportionately benefit rich corporations and wealthy individuals; it expands the federal debt by $1.5 trillion or more; it’s biased against blue states that provide better public services and education; yes, it’s the pits. And yet…

In at least two ways, this new tax cut law will present opportunities and advantages for progressives, one next year, and the other in the future when Democrats recapture control of the White House, Senate, and House of Representatives, as early as January 2021. In this column, I’ll discuss the first – the tax legislation’s repeal of the so-called “individual mandate” in the Affordable Care Act (ACA). In my next column, I’ll explain how the tax cuts may empower Democrats to do a lot of good public policy in the near future.

Here’s the first way. The tax cut legislation reduces the ACA’s tax penalties under the so-called “individual mandate” to zero. Despite repeated media reports that the law repeals the individual mandate, that’s incorrect. Straight repeal is not permitted under the Senate’s strict “budget reconciliation” rules under which the tax legislation is moving forward, but reducing the mandate’s monetary penalties to zero is kosher.

Many have predicted that disabling the individual mandate will fatally undermine the ACA. That’s also incorrect. The 13 million people – with incomes between 0-138 percent of the federal poverty line – who got covered because of the ACA’s Medicaid expansion are untouched. Also, the 9 million between 139-400% of poverty who receive private health insurance subsidies will be largely unaffected. Continue reading “The Republican Tax Cut’s Silver Linings Playbook”

Questions for New Single Payer Advocates

[This commentary was posted by the Milbank Quarterly this week.]

Seeing, hearing, reading, and feeling the new grassroots ferment among progressive Americans for a single-payer health care system, my gut reaction is: I get it. As newly documented in Elizabeth Rosenthal’s book, An American Sickness,¹ and the Commonwealth Fund’s report, Mirror, Mirror 2017,² our health care system provides shockingly poor value and outcomes, and rests on a foundation of greed. It deserves fundamental change.

So why not start all over with single payer or Medicare for all? Before answering, let’s consider 4 critical questions.

Question 1: What have we learned from prior single-payer state ballot initiatives over the past 25 years that could inform future efforts?

Though most don’t remember, health care activists in 3 states had the temerity to place a binding single-payer initiative on their state ballot over the past 24 years: California in 1994, Oregon in 2002, and Colorado in 2016. Once every decade in recent history, a group has bet that the public is finally fed up and ready for change. Though initial public opinion polls in each state showed promising prospects, the final tally in each state was disappointing:

Year	State	% Yes	% No
1994	California	27	73
2002	Oregon	21	79
2016	Colorado	20	80

The California vote happened only 3 months after the collapse of President Bill Clinton’s universal health care proposal. Many activists then asserted that if only Democrats had advanced single payer instead of Clinton’s wonkish contraption, reform would have prevailed. California provided a robust, timely, and failed test of that hypothesis. Similarly 22 years later, the Colorado initiative gave voters in that state a chance to endorse “real” reform above and beyond the incremental Affordable Care Act. Mission not accomplished.

In each case, single-payer advocates could not make the case to convince voters that the program would be financially sound. Ultimately, each attempt scared away each state’s bipartisan political and health care establishments (including leading hospital and physician associations).

To the new generation of single-payer advocates, what have you learned from these precedents, and what do you know that advocates in these states did not?

Question 2: What have we learned from Vermont’s failure to enact single-payer legislation between 2010 and 2014?

The years 2010 and 2011 were heady for Vermont single-payer advocates. A new Democratic governor, Peter Shumlin, backed by solid Democratic majorities in the State Senate and House, made state enactment of single payer his highest legislative priority. An independent analysis made the plan, including financing, seem like a no-brainer. The legislature agreed, enacting a new law in 2011 to establish the Green Mountain Health Plan, which would implement the ACA in 2014 and then a single-payer system by 2017. The fly in the ointment? The legislature and governor delayed unveiling their financing plan, including new taxes, until 2014.

Meanwhile, some things began to go wrong. State government’s ACA implementation, especially the health exchange website, was a disaster, undermining public confidence in their ability to manage the entire health care system. Also, Shumlin kept delaying release of a financing scheme because deeper analysis showed weaker financing. In the fall of 2014, Shumlin barely won reelection with a 47-46% margin against a Republican who made opposition to single payer his central campaign pledge.

In late 2014, Shumlin threw in the towel, abandoning the project rather than trying to convince Democratic legislators to embrace estimated new income taxes up to 9.5% and new employer payroll taxes up to 11.5%. Final estimates showed that the new taxes could make the program work financially, though with zero margin for error. In the end, Shumlin’s call was political; he could not justify sending his party over a cliff on such a weak and risky bet.

To the new generation of single-payer advocates, what have you learned from Vermont’s experience to inform a national campaign?

Question 3: Because the Achilles’ heel of single payer is financing, how can this be presented and managed in a way that avoids political collapse?

The new field of behavioral economics helps here. A core tenet is that people value hypothetical losses far more than hypothetical gains. If I promise Jane $100, she likely will believe it when she sees it. If I tell James that I’m going to take $100 from him, he’ll take me more seriously than Jane, and get his pitchfork ready the next time I come near him.

This has happened in previous attempts at health reform. Presidents Harry Truman and Bill Clinton lost big-time because the opposition overwhelmed advocates and scared the uncommitted. Presidents Lyndon B. Johnson and Barack Obama won their reforms only after sharply limiting the benefits of their proposals to the elderly and to the residual uninsured population, respectively. Republicans lost their attempts at repealing the ACA in 2017 because now they were making the promises and Democrats scared the heck out of people.

Single payer echoes the Truman and Clinton approaches of big system change for everyone, the opposite of the LBJ and Obama approaches. Even the unaffected heed scare stories of impending harm—witness the overwhelming opposition to the ACA in 2009-2010 by senior citizens who were only helped by the law.

To the new generation of single-payer advocates, how will you avoid this trap?

Question 4: How will payments to hospitals, physicians, and other medical providers be set to save money without alienating the medical establishment?

I know the response—we’ll pay them Medicare rates. If it’s good enough for Medicare, it’s good enough for everyone.

While this sounds good, it obliterates the essential structure of US health care financing today which is based on much larger payments from private payers, especially employer-provided health insurance plans. Attractive hospital and outpatient facilities as well as high salaries for physicians, nurses, and everyone else in medical care don’t come from Medicare or Medicaid rates. They come from private financing. Like it or not, single payer based on Medicare rates would trigger wrenching changes to US health care financing.

Before that would happen, power sources across the system—hospitals, physicians, drug and device makers, insurers, and boundless others—would use every tool in their bountiful toolboxes to provoke a cataclysmic political fight, far beyond anything experienced in California, Oregon, or Colorado. It’s hard to imagine a time when so much money would be at stake.

To the new generation of single-payer advocates, how can you pass single payer if most hospitals, physicians, and other providers are on the other side against you?

An extraordinarily broad coalition of Americans joined together to oppose Republican ACA repeal-and-replace plans with impressive impact. Most of this coalition can unite today and find common ground to address and fix the ACA’s many flaws, to advance better coverage, and to up the ante on cost control and delivery system reform.

Or, we can bet the house on single payer and risk replaying the catastrophic defeats in the Truman and Clinton eras. Count me as open to the conversation and deeply unconvinced.

References

Rosenthal E. An American Sickness: How Healthcare Became Big Business and How You Can Take It Back .New York, NY: Penguin Press; 2017.
Schneider EC, Sarnak DO, Squires D, Shah A, Doty MM. Mirror, Mirror 2017: International Comparisons Reflect Flaws and Opportunities for Better U.S. Health Care. New York, NY: Commonwealth Fund; 2017. http://www.commonwealthfund.org/interactives/2017/july/mirror-mirror/. Accessed September 18, 2017.