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Does Failure To Expand Medicaid Kill People?

Who’s killing whom?

Writing in The New York Times the other day, Paul Krugman had this to say:

And while supposed ObamaCare horror stories keep on turning out to be false, it’s already quite easy to find examples of people who died because their states refused to expand Medicaid. According to one recent study, the death toll from Medicaid rejection is likely to run between 7,000 and 17,000 Americans each year.

Really? 17,000 deaths per year? This outrageous claim flies in the face of years of careful study by real economists — who have concluded that there is almost no relationship between health insurance and mortality in the general population. As we previously reported:

In independent empirical papers, Richard Kronick and David Card and his colleagues find little evidence that health insurance coverage significantly reduces mortality. Former Director of the Congressional Budget Office June O’Neill and her husband Dave also conclude that lack of insurance has little or no impact on mortality. See the discussion at this blog here, here and here.

So where does Krugman’s claim come from? Not from economists, it turns out, but from a Health Affairs blog post  by Sam Dickman, David Himmelstein, Danny McCormick and Steffie Woolhandler. And notably, they do not do what serious scholarly papers do — acknowledge the work of other scholars who have addressed this same topic.

Their numbers rely on surveys known to overestimate the uninsured and on results from papers with methodological problems that are both serious and widely known. Their claim that failing to expand Medicaid in conformance with ObamaCare dictates will kill somewhere between 7,115 and 17,104 people a year confuses ideological posturing with scholarship.

Knock, knock, knockin’ on heaven’s door

Colorado Health Exchange Premiums Roughly Equal to Those of High Risk Pool

iStock_000004795595LargeIn 2013, Rebecca Ryan of Fort Collins, Colorado, paid $375 a month to be insured by CoverColorado, the state’s plan for people who are uninsurable. When the state ended that plan on December 31, 2013, 14,000 people became uninsured and had to find ObamaCare plans.

Ms. Ryan went to the state exchange. The least expensive available option was a Kaiser-Permanente HMO that cost about $360 a month. Ms. Ryan says that it had a roughly similar deductible of $5,000 per person and total out-of-pocket costs of $6,350. Unlike Kaiser, however, CoverColorado allowed members to see any provider in the state.

The Kaiser plan did not include Ms. Ryan’s longtime physician. The only exchange plan that did that was a new, untested, Co-op plan that cost $526 a month. When asked, the exchange representative agreed that “they are going to penalize me because I want to keep my doctor.”

Keep in mind that CoverColorado charged individual premiums that were 137 percent of the “industry average,” calculated as weighted average of Colorado’s five largest individual health insurance carriers’ premiums, adjusted for benefit differences.

Ms. Ryan’s experience in the exchange suggests that ObamaCare may have raised Colorado’s average individual premiums by 37 percent.

Are Price Controls Disguised as Bundles the Next Step in Bending the Medical Cost Curve?

Fresh from reimaging health insurance, mainstream health policy analysts have now set their sights on the way that people who provide medical care are reimbursed. Initial indications are that this will not go well for patients. Academics and government agencies seem imbued with the conviction that every medical procedure in America costs twice as much as it should due to “flat of the curve medicine,” and that vast fortunes can be saved simply by chopping reimbursements.

The table below lists Medicare’s 17 most expensive conditions. It is from a paper on reducing costs by changing Medicare payments from patient based payments to “bundled episode payments.” The authors argue that this reform could save $10 billion a year. They implicitly assume that higher average payments per patient “episode of care” in the 306 hospital referral regions that make up the upper 75th percentile of the payment distribution have no value. Given that, if one caps Medicare payments for each “episode of care” at the 25th percentile of the average cost per patient episode, one saves a great deal.

Annals of Cookbook Medicine, BMI Division

asdThe Daily Mail Online reports that this woman was told that she was overweight on a routine visit to an NHS clinic.

Her BMI of 29 classified her overweight, just one point below the obese cutoff of 30. She was advised to begin a 1,000 calorie a day diet.

Under ObamaCare rules, her employer would be perfectly within its rights in setting a target BMI of 26 and requiring her to either walk 150 minutes a week or pay more for her health insurance. It could also substitute a goal of reducing BMI by 1 point for the walking requirement.

Now that actually looking at patients is going out of style, someone like her may have to either put down those weights or pay more for health insurance.

Big Arms and Wrong Size Cuff Equals High Blood Pressure

As President Obama has said, “health care is hard.”

If your upper arm circumference is larger than 13 inches and your physician has been measuring your blood pressure with a standard adult blood pressure cuff, your blood pressure might be lower than you think. You’re in good company — an estimated 68 percent of Americans have upper arms large enough to require a large blood pressure cuff for an accurate measurement.

Doctor Checking the Blood Pressure of a PatientUsing the wrong cuff can change a person from healthy to hypertensive. The Eighth Joint National Committee (JNC 8) U.S. guidelines say that people with readings over 140 should be treated for hypertension. At the Mexican National Bodybuilding and Fitness Championship, Fonseca-Ryes et al. found that using a medium cuff on 144 individuals with arm circumference larger than 13 inches resulted in systolic pressure readings at or above 140 mm for 48 of 144 individuals. When using a large cuff, only 17 of the same 144 individuals had blood pressure above 140 mm. In a mixed population, the authors found that using a standard cuff on big arms increased measured systolic blood pressure by 2-5 mm for each additional 2 inches in arm circumference.

How ObamaCare Blocks Innovation in Insurance Plan Design

ObamaCare critics have warned that it will block beneficial innovations. Here’s how it is likely to block a type of coverage redesign that has recently become one of the pet projects of mainstream health reformers.

Advocates for value-based health plan design maintain that health care expenditures will fall if patients’ out-of-pocket costs are properly aligned with the value of health services. Out-of-pocket costs should be lower for so-called high value health services than for low valued services.

The problem, as reader David Napoli pointed out on the Incidental Economist blog, is that ObamaCare rules are not designed for a value-based approach. If an insurer implements a value-based design in which it pays more for a high value service, it raises the actuarial value of its policy. If it raises it enough, the plan may no longer qualify for its metal tier. The insurer must revise the plan to stay compliant. But if the insurer does this by making less valued services more expensive, it may run afoul of a state’s “Reasonable Modification guidelines.” They limit the changes that can be made to approved policies. A plan with changes that are “too large” must be canceled and refiled as a new plan in the next plan year.

In terms of brain damage, the easiest route for a carrier is to stay within the plan’s metal tier by increasing its deductible.

More Accurate Measures Suggest Declining Income Inequality

Like quality health care, income inequality is a slippery concept. In both cases, the official metrics have serious problems. They often tell a different story than measures that are more carefully constructed.

In the U.S., for example, Cebula and Feige estimate that 18 to 23 percent of U.S. income is not reported to the IRS. Under-reporting appears to increase with federal tax rates, unemployment, and general dissatisfaction with government. Hurst et al. estimate that the self-employed under-report their income in the national surveys used to produce the official statistics by 25 percent.

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Waiting List Too Long? Destroy the Records

document-shredding-and-information-destructionPatrick Howley of the Daily Caller reports that Department of Veterans Affairs employees destroyed medical files in a “systematic attempt to eliminate backlogged veteran medical exam requests.” Oliver Mitchell, a former patient services assistant in the VA Greater Los Angeles Medical Center said that the center got about 3,000 requests a month for exams but only had the resources to do 800. Because waiting lists counted against a hospital’s efficiency report, officials began discussing how to make their waiting list look better by destroying records.

Markets at Work: Hernia Surgery

The cash price for repairing an uncomplicated inguinal hernia at a practice in Denver was $740 for the surgeon, $928 for the anesthesiologist, $2,456.42 for the surgery center, and $140 for the surgical mesh used to strengthen the hernia repair. The total was $4,264.42. And although insurer contract prices remain a deep, dark, secret until the bill arrives, several people in Denver who were experts at pushing paper suggested that these cash prices were significantly below the usual network prices.

The total cash price at the Surgery Center of Oklahoma in Oklahoma City was $3,060, including mesh and a consultation with a surgeon who patiently answered a series of questions. The difference between the price in Denver and the price in Oklahoma City was roughly $1,200.

The cost of roundtrip airfare for two from Denver to Oklahoma City is currently around $450. Two nights at a medium priced hotel is about $200 including breakfast, a rental car for three days would run around $140. Figure another $100 for food, $200 to kennel the dogs, and $36 for airport parking. This works out to $1,126.

Medicare Reimbursement Cuts Kill

Under the Balanced Budget Amendment of 1997, different classes of hospitals received different cuts in Medicare reimbursement. The cuts reduced Medicare inpatient payment by an estimated 5 percent between 1998 and 2000. By contrast, the Affordable Care Act (ObamaCare) will reduce DRG payments by 1.1 percent per year indefinitely. A 2013 article (open preliminary version) by Yu-Chu Shen and Vivian Y. Wu examines the effect of the BBA reimbursement rate cuts on risk-adjusted mortality rates 7, 30, 90, and 365 days after hospital admission. They find that the risk of dying increases with the size of Medicare reimbursement cuts. Patients with heart attacks, congestive heart failure, stroke, pneumonia, and hip fracture were included, from 1995 to 2005.

Despite reimbursement cuts, mortality trends were similar in the first two years that the BBA took effect. After 2001, mortality rates began to diverge. For conditions with declining mortality rates, hospitals with smaller payment cuts had a sharper decline in their mortality rate than those with larger payment cuts. For stroke and hip fracture, conditions for which mortality rates increased until 2003, mortality rates increased more slowly in hospitals with smaller reimbursement cuts. Mortality a year after admission for hip fracture was apparently unaffected by reimbursement reductions. The authors note that this may reflect the fact that over 90% of hip fracture cases are discharged to postacute treatment facilities.