Health Policy Updates: October 22 2016

The big policy news from this last week was that the Center for Medicare and Medicaid Services (CMS) released the so-called “final rule” on the Medicare Access and CHIP Reauthorization Act of 2015, also known as MACRA.

What is MACRA, you ask? And what is a “final rule”? Well, you may remember intermittent debates, fights, and panics a few years ago about the Sustainable Growth Rate, and Medicare reimbursement formula that always threatened to drastically cut doctors’ pay under Medicare, except for the fact that Congress kept “temporarily” delaying it for years. MACRA is the replacement – no huge cuts to doctors’ pay immediately, but it does put into place a new regime of cost-controlling strategies linked to holding physicians accountable to a range of quality-of-care measures. The final rule finalized, ahem, the exact cadre of payment incentives, deductions, and implementation time frames that constitute MACRA. Health Affairs summarizes here.

“As an initial sign they hit the target, key Members of Congress have already weighed in applauding the Rule. Here’s a tip: when Members applaud a regulation like this so quickly, two things are going on: 1) they are taking a solid helping of credit for changes the agency has made; and 2) they are putting affected stakeholders on notice that they have an uphill battle in securing new changes soon. Read: this is as good as it’s going to get.”

This week also saw the third and final presidential debate between Donald Trump and Hillary Clinton. Despite being one of the biggest items in the federal budget, health care again got little attention. As Julia Belluz at observes, Americans seem fairly comfortable with the lack of emphasis on health care policy, and public health in our country more broadly.

“And that’s a shame. Health care is obviously hugely important, but it’s public health — vaccine programs, improved sanitation, clean drinking water — that has given us the greatest gains in longevity over the last century. By ignoring these issues, politicians are missing an immense opportunity to impact the health and well-being of millions of Americans, and even prevent sickness and injury before they happen.”

Austin Frakt describes the pluses (lower costs) and minuses (harder time finding an in-network doctor) of the “narrow network” insurance plans that have proliferated under Obamacare.

“…savings were…achieved by more efficient use of the health system. Narrow network enrollees used the emergency department less, particularly for conditions treatable in office settings. The per-visit cost of outpatient care also fell for narrow network enrollees, which would be expected if the plans paid lower prices.”

More data out this week from the Oregon Health Insurance Experiment to deflate the popular (among both politicians and the public) myth that increasing people’s access to health insurance and primary care will save health care dollars by reducing their use of expensive ED services. On second though, this myth doesn’t even make sense to begin with – why would we expect people to use less health care services, of any kind, after it is made cheaper for them to do so?

“Thus, using another year of ED data, we found no evidence that the increase in ED use due to Medicaid coverage is driven by pent-up demand that dissipates over time; the effect on ED use appears to persist over the first 2 years of coverage. We repeated a similar analysis for hospital admissions and once again found no evidence of any time patterns in the effects of Medicaid coverage over the first 2 years”

An interesting report this last week on the “creation” of a disease, allegedly in order to create a market for new pharmaceuticals to treat it. The disease in this case is “overactive bladder,” a rebranding of what we used to call “incontinence.” Stories like this are anecdotal of the larger trend towards medicalization and potential overtreatment of conditions that did not used to be considered as diseases.

“What followed was an example of illness inflation — an effort driven by drug companies to create or expand the definition of conditions that are part of everyday life and to create guidelines that call for treatment with drugs that are expensive and often dangerous.”

Health economist Uwe Reinhardt skewers the idea of tax-deductible health expenses (or any other form of tax deductibility, for that matter) as an effective increase in government spending that benefits mainly high income earners.

“The preference for tax deductibility to further social goals…is widely applied in health care. Employer-paid contributions to the premiums for their employees’ health insurance, for example, can be deducted by employers as a tax-deductible business expense but are not counted, as are cash wages, in the employees’ taxable income. Deposits into tax-preferred Health Savings Accounts (HSAs) similarly are effectively tax deductible, as are medical expenses above a specified limit. In each case, the policy is regressive in the sense that it bestows a higher public subsidy on high-income households than on low-income households.”


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