How to Decide if a Policy Designed to Increase Access Is Good

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When I was evaluating Joe Biden’s healthcare plan recently, I talked about how to properly evaluate policies that attempt to increase access. I think this is important enough to discuss briefly in its own post.

But first, as a brief reminder, there are traditionally three issues that healthcare reformers are attempting to solve: cost, quality, and access. And I like to combine quality and cost into one variable–value.

Access-increasing policies are typically evaluated based on (1) how many people they will cover and (2) how much they will cost, but we need to add a super important third metric in: How many barriers the policy creates to improving value.

Just because access-increasing reforms of the past have worsened healthcare value doesn’t mean they always have to do that. It just means healthcare reformers of the past haven’t known how to improve the value of healthcare, so they haven’t been able to evaluate their policies on that metric. But that’s what the Healthcare Incentives Framework is for (specifically this part of it), and that’s why I have been using it to evaluate politicians’ access-increasing policies lately.

And by the way, I’ve already written about how pretty much any universal-access system, properly implemented, can do very well on that third metric.

My Evaluation of President Trump’s Healthcare Platform

Image credit: apnews.com

I’ve been going through a number of Democrats’ healthcare plans, so it decided it’s President Trump’s turn. As with the others, I will rely exclusively on his official campaign website.

The problem, however, is that President Trump’s campaign website doesn’t give much information like the others. There isn’t an “Issues” section that lays out his plans for all the major policy topics. Instead, he has a “Promises Kept” section, which lists his achievements in each major policy area, including healthcare. This is helpful for seeing what he’s already done, but it doesn’t give any substance on what he plans to do if he wins another term as President. Is this an acknowledgement that he doesn’t have a plan, or does he just want to focus instead on all the things he’s already accomplished? Probably a little of both.

So, in the absence of any declared plan, let’s instead look at some direct quotes from his website. These are what I believe to be the main big-picture points:

  • The Department of Agriculture provided more than $1 billion in FY2017 to be used to improve access to health care services for 2.5 million people in rural communities.
  • The Trump administration expanded access to Association Health Plans (AHPs) allowing small business to pool risk across states.
  • The Trump Administration allows for Short-Term Limited Duration plans to be extended up to 12 months.
  • As part of the landmark Tax Cuts and Jobs Act President Trump repealed the individual mandate, which forced people to buy expensive insurance and taxed those who couldn’t afford it.
  • President Trump signed a six-year extension of CHIP to fund healthcare for 9 million.

And then looking at the sidebar on that same webpage, it links to a chronological list of his major healthcare-related achievements. Here, again, are direct quotes of what I believe to be the main big-picture points:

  • Protected people with preexisting conditions. (2/5/19)
  • HHS finalized a rule aimed at increasing transparency in the pharmaceutical industry that requires drug companies to disclose the price of medication in direct-to-consumer television advertisements. (5/8/19)
  • Worked with Congress to stop surprise medical billing. (5/10/19)
  • Created new insurance options though association health plans, short-term plans, and health reimbursement arrangements: some are up to 60% less expensive. (6/13/19)
  • President Trump put reforms into place that have expanded Medicare Advantage options and Health Reimbursement Accounts. (6/14/19)
  • President Trump signed an executive order that increased price and quality transparency in American health care. (6/24/19)
  • Empowered patients to choose the best doctor at the best price, gave Americans transparency with the price and quality of service before you buy. (6/24/19)
  • The Trump Administration issued guidance expanding options for individuals with chronic conditions. High deductible plans can now cover products such as insulin, inhalers and statins pre-deductible. (7/18/19)
  • HHS awarded almost $107 million to 1,273 health centers across the U.S. in order to improve the quality of the centers’ health care services. (8/20/19)
  • The Administration proposed a rule to require insurance companies and group health plans to provide enrollees with cost estimates. (11/17/19)
  • Costly Obamacare taxes were repealed, including the “Cadillac tax” and the medical device tax. (12/16/19)
  • President Trump signed four executive orders to ensure that Americans are receiving the lowest price possible for their prescription drugs. (7/24/20) (Must have been in response to my 6/16/20 post about difficulties finding the lowest cost of prescription drugs!)
  • President Trump signed an executive order expanding access to telehealth services in order to ensure rural Americans access to healthcare. (8/3/20)
  • President Trump signed an executive order to lower drug prices by expanding drugs covered by the “most favored nations” pricing scheme to include both Medicare Part B and D. (9/13/20)
  • President Trump signed an America-First Healthcare executive order, stating the policy of the Federal Government is to protect those with preexisting conditions & ensure access to affordable care. (9/24/20)

I don’t think it’s accurate for me to be too critical of what he has or hasn’t done based on just this information. Take, for example, the executive order to increase price transparency. When you read the details, it represents a legitimate first step toward making prices available to patients. These tiny achievements snippets just don’t give enough detail, nor do they cover all the efforts of his broader administration, such as the CMS-guided shift to value-based purchasing.

But I do think it’s fair for me to say that President Trump has not led the Republicans to making great strides toward fixing any of the three issues usually argued about in healthcare (cost, quality, access). And possibly this is because the Republican party is kind of stuck.

Think about it. Nobody in government has a solid solution to improving cost and quality in healthcare. But Democrats can still at least work toward achieving universal access. Republicans, on the other hand, traditionally don’t prioritize or champion efforts to achieve universal access, so what are they left with? Nothing substantial.

Maybe next week I need to help President Trump out and write a healthcare platform for the Republican party.

Evaluating the ACP’s Vision for Our Healthcare System, Part 3 of 3: Coverage and Cost of Care

The last in my series evaluating ACP’s “vision for a better U.S. health care system.” Check out the intro to the series, Part 1, context for Part 2, and Part 2.

This is the paper that generated the most media attention, much of which incorrectly asserted that the ACP endorsed “Medicare for All.” So let me, at the outset, clear this up: The ACP doesn’t endorse Medicare for All in this paper. It endorses a couple different options to achieve universal coverage, one of which is a single-payer system. There are many ways to achieve a single-payer system, and Medicare for All is just one way to do that. Maybe this sounds like semantics, but I think it’s important to be accurate here because the term “Medicare for All” carries with it a lot of specific ideas about how a single-payer system should be implemented, and it also carries with it specific political affiliations. The ACP was not committing to any of those specific ideas or political affiliations; the writers were only endorsing the general single-payer system approach as one of two options for how to increase insurance coverage.

Now, on to assessing the details of the paper.

Part 1 of this paper reviews the state of insurance coverage and healthcare spending, which sets the stage for Parts 2 and 3 to talk about ways to expand coverage and lower care costs.

Part 2 is mostly what I want to talk about. First, it asserts unabashedly that the ACP feels that universal health insurance coverage is essential. And since having insurance coverage is pointless if its spending requirements are not affordable or if providers are unavailable, it adds those access details in as also being essential.

Then it lists two options that it sees as being able to achieve that goal: a “single-payer financing approach” and a “publicly financed coverage option.” Let’s look at each one.

Single-payer financing approach. This means a single government-run insurance company provides insurance for everyone in the country. It doesn’t necessarily prevent people from purchasing private supplemental insurance, but it would cover everything considered to be essential. The paper then discusses some of the well-known benefits and concerns that come along with having a single-payer system. The interesting part to me, which makes sense coming from a physician organization, is their particular concern about how this would affect physicians. It could decrease administrative burden and uncompensated care, but it could also decrease autonomy. And the big concern is that if it relies on “Medicare’s flawed payment system,” it would perpetuate a few undesirable things, including bad incentives (such as an over-reliance on fee for service), the overvaluing of certain services (procedures), and unsustainably low reimbursements (that would make some providers go bankrupt). Any prior “Medicare for All” proposal I’ve seen relies on Medicare’s payment system, so this is a good example of why the ACP is not endorsing Medicare for All specifically.

Publicly financed coverage option. Another name for this is a “public option.” Basically it’s a government-run insurance plan that will be offered alongside private insurance plans. It would be available for employees to opt into rather than use their employer-sponsored insurance as well. An essential part of this insurance plan is that it would have premium and cost-sharing subsidies (so that, again, lower-income people don’t end up with useless coverage). Later on in this paper, they say that no matter which option is chosen, it needs to have included with it a mandatory or automatic enrollment component. I’m not sure how premiums would be paid for by people auto-enrolled into the public option plan–possibly through filing their taxes–but isn’t this looking more and more like the Affordable Care Act? Require people to have insurance coverage and subsidize lower-income people to be able to buy it? Yes, that’s the ACA. The one difference is that one of the insurance plans people can select from will be run by the government (which, incidentally, was originally part of the ACA plan).

So those are the two options the ACP supports. They also mention another approach: convert all insurers to non-profits and require everyone to have health insurance (another variation of the ACA, but this time there’s no public option and instead all the insurers are non-profits). But they say there is not enough information on how such a system could be applied to the U.S., so they don’t endorse it. And all the other options for reform that are out there (such as “market-based approaches”) would not achieve universal coverage, so they were eliminated from consideration.

Even though the ACP is politically neutral, you can see that their foundational beliefs and priorities line up much more closely with modern liberal thinking rather than conservative thinking/beliefs/priorities. This is what I expected, and I discussed it in my intro to this series.

Part 3 discusses strategies they support to lower healthcare costs. There are 5 of them: invest more in primary and comprehensive care, reduce excessive pricing and improve efficiency, reduce low-value care, rely more on global budgets and all-payer rate setting, and use more reference pricing.

Rather than get into the merits and drawbacks of these different policies here, lets finish this series with a brief discussion about whether the two options they endorse to attain universal coverage will get in the way of the ideas we talked about in Part 2.

If you will recall, the second ACP paper we discussed gave 6 different recommendations, the two main ones being to (1) give patients price and quality information to help them choose higher-value providers and (2) getting providers to shift to value-based purchasing arrangements (especially different forms of capitation) with insurers.

With a single-payer system, usually the implementation involves setting a uniform nationwide price for each service (adjusted by region for cost of living). This would completely ruin their idea of getting patients to choose providers based on value because the price would be the same for all providers. I will not get into detail on how, but setting a price floor like that completely distorts providers’ innovation incentives. It would kill pretty much any cost-lowering innovation that results in slightly reduced quality, even if the innovation could result in drastically lower cost.

But, on the upside, since there’s only one insurer to deal with, a single-payer system would allow for perfectly uniform incentives for any provider that chooses to enter a VBP arrangement!

With a public option like they have described, there is the exact same problem with distorted/ruined incentives due to uniform pricing, but at least the extent of the problem is limited to the number of patients who are on the public option plan. And, as for providers’ efforts to enter into VBP arrangements, it would probably make it slightly easier to get uniform incentives because I assume VBP arrangements would be harmonized between Medicare and this public option. But any provider who wants to design their own VBP arrangement is going to have to have an even harder time attaining uniform incentives because I suspect they would have to convince the plan administrators of Medicare and the public option independently, which means they’re trying to win over yet another public payer to be able to move forward with their idea.

Am I saying that the ACP’s efforts to accomplish universal coverage will interfere with their efforts to improve the care delivery system? Yes. The two options they endorse don’t necessarily need to be implemented in a way that does that, but I see nothing in what they’ve written that specifies that they should be implemented in a way that mitigates those problems. (For details on how this could be done, see what an optimal single-payer system would look like here and what an optimal ACA-type system would look like here.)

I think different groups of people were working on each paper, and even though they were reporting their findings and recommendations to the same group of ACP leaders for approval, it’s quite a difficult task as one of those ACP leaders to be presented with complex recommendations from two different groups and figure out exactly how they might conflict with each other.

Well, there we have it. The ACP endorsed some things that would be very beneficial, but they fell into the same trap of not thinking about these things from a complete system perspective, so their efforts to get more people into the system will interfere with the changes the system needs to deliver better value over time. This is why any healthcare reformer first needs to have a firm understanding of the core causes of low value and how those can be resolved before deciding on the details of how to enact universal coverage.

But I am happy the ACP jumped directly into this arena. It shows that powerful physician groups are also interested in figuring out how to fix the healthcare system. Maybe the biggest benefit from their efforts of researching and releasing these papers (and then having them critiqued) is that it will make the ACP and other provider groups more likely to recognize and support policies that will truly move us closer to fixing our healthcare system.