Tag: ObamaCare

Must-Read: Zarek C. Brot-Goldberg et al.: What Does a Deductible Do?: The Impact of Cost-Sharing on Health Care Prices, Quantities, and Spending Dynamics

Posted on by Brad DeLong

Must-Read: Yes. When the stakes are large, the pricing structure is complex, transparency absent, and opportunities for social learning spotty, people are really lousy consumers. Why do you ask?

Zarek C. Brot-Goldberg et al.: What Does a Deductible Do?: The Impact of Cost-Sharing on Health Care Prices, Quantities, and Spending Dynamics: “Measuring consumer responsiveness to medical care prices is a central issue…

…in health economics and a key ingredient in the optimal design and regulation of health insurance markets. We study consumer responsiveness to medical care prices, leveraging a natural experiment that occurred at a large self-insured firm which forced all of its employees to switch from an insurance plan that provided free health care to a non-linear, high deductible plan. The switch caused a spending reduction between 11.79%-13.80% of total firm-wide health spending ($100 million lower spending per year)…. Spending reductions are entirely due to outright reductions in quantity. We find no evidence of consumers learning to price shop after two years in high-deductible coverage. Consumers reduce quantities across the spectrum of health care services, including potentially valuable care (e.g. preventive services) and potentially wasteful care (e.g. imaging services)…. Consumers respond heavily to spot prices at the time of care, and reduce their spending by 42% when under the deductible, conditional on their true expected end-of-year shadow price and their prior year end-of-year marginal price. In the first-year post plan change, 90% of all spending reductions occur in months that consumers began under the deductible, with 49% of all reductions coming for the ex ante sickest half of consumers under the deductible, despite the fact that these consumers have quite low shadow prices. There is no evidence of learning to respond to the true shadow price in the second year post-switch.

Must-Read: Kevin Drum: Red States Spent $2 Billion in 2015 to S—- the Poor

Posted on by Brad DeLong

Must-Read: Nobody is saying anymore that states’ rejecting Medicaid expansion is a way of raising the chances of repealing-and-replacing ObamaCare with something better. Only true dead-enders–cough, Michael F. Cannon–are claiming that Medicaid is ineffective. And more and more evidence piles up that Medicaid expansion lowers rather than raising state-level health spending even in the short run. The remarkable thing is that the anti-Medicaid expansion zombies just keep on going–and it’s not just the poor, it’s the disabled, it’s the elderly whom Medicare copays have made poor, and its the hospitals and doctors and nurses who treat the poor:

Kevin Drum: Red States Spent $2 Billion in 2015 to S—- the Poor: “In 2015… spending by states that refused to expand Medicaid…

…grew by 6.9 percent. That’s pretty close to the historical average. However, spending by states that accepted Medicaid expansion grew by only 3.4 percent. Obamacare may have increased total Medicaid enrollment and spending, but the feds picked up most of the tab. At the state level, it actually reined in the rate of growth…. The states that have refused the expansion are… willing to shell out money just to demonstrate their implacable hatred of Obamacare. How much money? Well, the expansion-refusing states spent $61 billion of their own money on Medicaid in 2014. If that had grown at 3.4 percent instead of 6.9 percent, they would have saved about $2 billion this year… denying health care to the needy and paying about $2 billion for the privilege. Try to comprehend the kind of people who do this….

The residents of every state pay taxes to fund Obamacare, whether they like it or not. Residents of the states that refuse to expand Medicaid are paying… Obamacare taxes… about $20 billion of that is for Medicaid expansion…. So they’re willing to let $20 billion go down a black hole and pay $2 billion extra [a year] in order to prevent Obamacare from helping the needy. It’s hard to fathom, isn’t it?

And Mitt Romney Throws Off the Mask!

Posted on by Brad DeLong

Mitt Romney: [The late Staples founder Thomas Stemberg was] an extraordinarily creative and dynamic visionary…. Mr. Stemberg was one of the great business leaders…

…of our state and our nation,’ Romney said. ‘He was not only the founder, but someone who grew the company to a multi-billion dollar enterprise. He built an industry that employs thousands and thousands of people…. Without Tom pushing it, I don’t think we would have had Romneycare. Without Romneycare, I don’t think we would have Obamacare. So, without Tom a lot of people wouldn’t have health insurance…

Mind you, Romney could claim he was criticizing the late Tom Stemberg–“without Tom, a lot of people wouldn’t have health insurance through RomneyCare and ObamaCare, and that would be a better world than this.” But somehow I don’t think Romney is going to go there.

I mean… Romney had so many opportunities over the past six years to play a constructive role… He took advantage of none of them… I… I can’t even…

Dysfunctional Debate Over Medicaid Expansion in Kansas City

Posted on by Brad DeLong

I actually made it to the second half of the Medicaid expansion in Kansas/Missouri panel last night:

Brad DeLong: Must-See: UMKC Medicaid Panel, and Think-Tanks: “Must-See: Alas! I seem to be missing the Kathleen Sibelius panel…

…on Medicaid expansion this evening at UMKC American Public Square: Dinner at the Square A Dose of Reality: A Medicaid Status Report…

Reactions:

  1. Tarren Bragdon, the President and CEO of the Foundation for Government Accountability, didn’t seem to either (a) know enough, (b) have gotten himself well enough briefed, or(c) be able to think fast enough to do anything other than regurgitate right-wing talking points. But, then, would anyone who could do (a), (b), or (c) want his job?

  2. Kathleen Sibelius and MO Hospital Association Senior VP of Governmental Relations Daniel Landon said about what I expected them to–and were, by and large, accurate and on point.

  3. Michael F. Cannon of the Cato Institute surprised me in a number of ways.

  4. Cannon claimed that Amy Finkelstein et al.‘s Oregon Medicaid study had found “no effect of getting Medicaid on physical health”. Not “no statistically-significant effect”. Not “effects quite possibly due to sampling error, but in line with clinical expectations”. Not “effects that might have been due to chance”. Not “effects that might not pass a sensible benefit-cost test”. Instead, he said “no effect”–over and over again, a couple of times qualified as “no discernible effect”. I wonder if he would have dared to so mischaracterize the Oregon Medicaid study–which found statistically significant and substantial effects on family finances, statistically significant and clinical substantial effects on depression (which is, mind you, a physical illness: brain chemistry plus, you know), clinically substantial but statistically not significant (due to low statistical power) effects reducing unhealthy blood sugars, and clinically substantial but statistically not significant (due to low statistical power) effects reducing unhealthy blood pressure–if Amy Finkelstein or their coauthors had been in the audience or on the panel?

  5. Cannon’s big argument–made over and over again–was that the Affordable Care Act was bad because it did not eliminate insurance companies’ ability to engage in adverse selection via insurance plan design, and that the regulations in the ACA to limit such simply showed that it was a serious problem. Now if you really do believe that adverse selection by insurance companies via insurance plan design is a fatal flaw in the ACA, that has consequences. Getting rid of the ACA makes adverse selection a much bigger problem, and thus a much more fatal flaw. If that is your objection to the ACA, then you are a single payer advocate. If you are intellectually consistent. Sibelius nailed him: “Now I do not understand whether you object to the ACA because it regulates insurance companies too much or too little.”

  6. Cannon’s slip-up when he said “the ACA is not going to be repealed”–apparently the start of the argument that he should not be held accountable for the consequences of the ACA appeal that he advocates. He stopped in mid-sentence, however, apparently realizing that was not a road he really wanted to go down.

  7. Cannon’s claim that his 48-year-old developmentally-disabled cousin in New Jersey did not deserve to have and should not have a Medicaid card because he came from “a large Irish Catholic family with lots of relatives to take care of him”. Presumably female relatives. Again, Sibelius nailed him: “New Jersey’s Republican Governor Chris Christie disagrees–he expanded Medicaid.”

  8. The “should Kansas/Missouri expand Medicaid?” argument is over before it starts. Kansas’s and Missouri’s taxpayers are paying for Medicaid expansion elsewhere. The question is whether they pay the taxes and get the benefits, or pay the taxes and don’t get the benefits. Thus the only argument that can be made is that there are no benefits–hence the misrepresentation of the Oregon Medicaid study that Medicaid does no good, the claim that those who qualify for Medicaid under the expansion do not “deserve” it, attacks on overpaid health-care providers who receive Medicaid payments. Plus, most recently, Kansas’s Governor Brownback’s claim that the real purpose Obama has in mind with Medicaid expansion is to keep urban hospitals that treat Black people open. (False, by the way: the hospitals most at risk from the absence of Medicaid expansion in Kansas right now are rural hospitals that treat poor people.)

Must-Read: Harold Pollack: If you want mental health services to prevent violence, Medicaid expansion is critical

Posted on by Brad DeLong

Must-Read: Harold Pollack: If you want mental health services to prevent violence, Medicaid expansion is critical: “Oregon’s mass homicide sparked the usual debate about whether guns or mental health is the best focus in preventing atrocities…

…Given this stark frame, the centrality of gun policy is hard to deny. Compared with other wealthy democracies, America has surprisingly similar rates of car theft, aggravated assault, and other forms of nonlethal violence. Our gun homicide rate is about three times the average…. Gun policy measures such as improved background checks included in the nearly-passed, bipartisan, post-Newtown Manchin-Toomey bill would certainly be helpful. Many conservatives place greater emphasis on the mental health system. In some ways, this rhetoric is misplaced. The fraction of American violence attributable to severe mental illness is… on the order of five percent. We must also avoid reinforcing cruel stereotypes….

Still, it’s always wise to consider how our mental health systems could treat people more effectively, and more-reliably keep weapons away from dangerous individuals… expand the power of police and mental health professionals to temporarily confiscate guns from individuals whose behavior raises real concerns, but who do not meet the stringent criteria required to justify involuntary commitment…. Texas Senator John Cornyn has proposed… [to] expand states’ provision of mental health information to the National Instant Criminal Background Check System…. The potential impact of such data-sharing remains unclear…. Cornyn’s proposal does not address the most glaring issue in American mental health policy: the Affordable Care Act’s Medicaid expansion… the public health cornerstone of ACA…. Medicaid expansion provides financial stability to the whole network of safety-net medical, psychiatric, and addiction care…. In 2013, the National Alliance on Mental Illness (NAMI) released a report endorsing Medicaid expansion…. Addressing the connection between mental illness and violence, NAMI concluded:

In the aftermath of Newtown, many politicians and policy makers have promised to take steps to fix America’s broken mental health system. Expanding Medicaid in all states would represent a significant step towards keeping those promises.

Senator Cornyn is an implacable opponent of Medicaid expansion. Indeed he rallied at the Texas state capitol to oppose it…. Addiction and psychiatric disorders within the population of Texans deliberately left uninsured… 140,000… with addiction disorders… 54,000 live with severe mental illness… indigent criminal offenders and those seeking care at addiction treatment centers and stressed safety-net facilities that have lost billions of dollars because Texas has declined Medicaid. Leaving aside the human consequences for the uninsured, this is very poor violence prevention policy. If any other politician suggests that mental health rather than gun policy is central to reducing mass homicides, ask where they stand on Medicaid expansion. Their answer will be clarifying.

Must-Read: Kenneth E. Thorpe, Lindsay Allen, and Peter Joski: Out-Of-Pocket Prescription Costs Under a Typical Silver Plan Are Twice as High as in the Average Employer Plan

Posted on by Brad DeLong

Kenneth E. Thorpe, Lindsay Allen, and Peter Joski: Out-Of-Pocket Prescription Costs Under a Typical Silver Plan Are Twice as High as in the Average Employer Plan: “The most popular Marketplace plan—the silver plan—has significantly higher cost sharing…

…than does a typical employer-sponsored plan, which may cause patients to reduce the use of cost-saving services that are essential for managing chronic conditions. We estimated the impact of higher cost sharing on drug and medical spending among patients with chronic conditions… out-of-pocket expenses for medications in a typical silver plan are twice as high as they are in the average employer-sponsored plan, resulting in fewer prescriptions filled and refilled and in higher spending on other medical services. Maintaining the use of cost-effective prescription medications might require lower cost sharing for patients with chronic conditions than is currently found in the Marketplaces.

Must-Read: Nicholas Bagley, Amitabh Chandra, and Austin Frakt: Correcting Signals for Innovation in Health Care

Posted on by Brad DeLong

Nicholas Bagley, Amitabh Chandra, and Austin Frakt: Correcting Signals for Innovation in Health Care: “A combination of legal rules and institutional forces pushes health plans to cover nearly every medical innovation…

…The result is that many Americans are effectively forced to over-insure themselves for coverage of some therapies they do not much value. At the same time, others might be willing to spend even more on health plans that would cover therapies that are not considered medically necessary or that have not yet been developed. Technology developers thus receive distorted signals about the size of the market for new innovations, leading them to develop medical treatments that are not in line with what Americans would demand in a wellfunctioning market….

The most prominent policy ideas for reining in spending growth concentrate on slowing the rate of technology diffusion. In so doing, they fail to fully grapple with the mix and pace of technology innovation…. Addressing the incentives for technology development, and not just its diffusion once invented, is critical. We therefore advance a handful of policy proposals to adjust the innovation signal…. (1) Replacing the tax exclusion for employer-provided health insurance with a tax credit, (2) strengthening Medicare’s coverage determination process, and (3) experimenting with reference pricing for certain therapies…. Alternative approaches to tackling the one-size-fits-all nature of insurance–in particular, allowing health plans to compete on the scope of what technologies they cover–would require regulations that are unlikely ever to be politically and culturally attractive.