Monday, January 30, 2012

Senior Tax Deferrals

There is an op-ed in today's O that demonstrates the difference between a government program and private insurance.  The state of Oregon has long had a property tax deferral program to help seniors stay in their homes.  Taxes are deferred until a home is sold, with annual interest charges accruing.  The program is equivalent to a reverse mortgage with the annual payment fixed at the property tax level.  The state acts as the insurer, fronting the deferred taxes to counties and taking risk on the level of repayments.

Unsurprisingly, the program has gotten screwed up because of the recession.  Tax repayments are no longer adequate to front the money to counties, and the state has to either find a way to reduce fronted expenses or get into the business of subsidizing senior property taxes.

The legislature opted for the former (emphasis mine),
The Revenue Committee's response to this temporary downturn was to eliminate 5,000 people from program rolls -- by capping enrollment, raising interest rates, changing eligibility rules and excluding anyone with a reverse mortgage. The cruelest response was to apply these changes retroactively to existing program participants.

The result was to disqualify nearly half of the 10,500 families in the program, including many lower-income homeowners -- the very people it was designed to help. Most participants had assumed that once certified for assistance, they could be reasonably secure in their retirement years and safe from the threat of tax defaults.
 I don't fault the legislature for refusing to create a subsidy, that money doesn't come out of the air.  It comes out of budgets for other priorities like education, healthcare, and social services which have already been slashed.  Prioritizing public spending, deciding what should be paid for and what should not is pretty much the legislature's job.

And that shows the difference between public and private insurance:  A public insurance program has no guaranty, it exists at the whim of lawmakers.  As a program it necessarily competes with other public spending for priority and its benefits and costs can be changed unilaterally with the stroke of a pen.  In contrast, private insurance is spelled out by contract and can be changed only with mutual consent.  People who buy private insurance don't have to justify its benefit against money for schools or Medicaid or whatever the public thinks is more important.

As participants in the tax deferral program are discovering, that is no small thing.

Thursday, January 26, 2012

Reading Now: Since Yesterday

An op-ed from a few months ago was interesting enough to land Since Yesterday on my reading list.  To my surprise the local library branch had a copy, which is now in my hands.

I'm reading it to get a sense of how we've changed since then, and how we have not.

I liked this passage, on FDR's inauguration speech:
You can turn off the radio now.  You have heard what you wanted to hear.  This man sounds no longer cautious, evasive.  For he has seen that a tortured and bewildered people want to throw overboard the old and welcome something new; that they are sick of waiting, they want somebody who will fight this Depression for them and with them;  they want leadership, the thrill of bold decisions.  And not only in his words but in the challenge of the very accents of his voice he has promised them what they want.
I feel the appeal of these sentiments, but I could also see them leading a nation to a really bad place.  Magnificent and terrifying...

Wednesday, January 18, 2012

Dancing around a problem

WonkBlog notes a CBO writeup on the failure of some Medicare demonstration projects to reduce spending.  The summation (emphasis mine):
Why didn’t the demonstrations reduce costs? Largely because they didn’t reduce the quantity of care delivered. Some programs actually correlated with increased hospital admissions. A few saw reductions. On balance, it was pretty much a wash — and a troublesome sign for the health reform law’s soon-to-launch attempts to curb Medicare spending.
That rang a bell, which led me to dig up this passage from Money-Driven Medicine (emphasis mine):
Critics [of pay for performance] point out that very few of the performance targets address the problems of overtreatment.  While CMS is rewarding health care providers to do "more" in the form of tests and procedures that they might overlook, there are few obvious incentives to do less.  "Counting how many patients survived bypass surgery is one thing," says one New York City hospital executive.  "But how many survived a surgery that they didn't need?  That's the important number that you'll never see."

Dr. Stephen Jencks, Medicare's director of quality coordination, concedes that the critics have a point:  "I would say we are moving much more slowly on trying to prevent overuse than in trying to fix underuse," he acknowledged at the end of 2004.  "If I tell a physician he shouldn't do a surgery he wants to do, I personally would anticipate a lot more resistance than if I told him he should give a medicine he wasn't thinking of giving."  Yet if Medicare and other payers don't find ways to locate and discourage unnecessary treatment, pay for performance will only add another layer to health care inflation.
Telling doctors what to do is hard, but it's even harder telling them what not to do.  We're going to have to grapple with that in a serious way if we want affordable health care.

Tuesday, January 17, 2012

Finished Money-Driven Medicine

Wow, this was good. 
Incorporating journal research, literature and original interviews, Mahar describes the myriad conflicts within the health care industry that drive up spending, and why that spending buys so little.  The chapters on for-profit hospitals and ineffective treatment are particularly good, the latter should be required reading for anyone who utters the phrase "death panel".  I like that the book is rich in sources, most of the articles are as relevant today as they were in 2006.  Here is one favorite:
There is no formal rationing system in the U.S., with its complex mix of private insurance and Medicare and Medicaid coverage, plus 41 million uninsured people who pay for their own care or get treated as charity cases. But in fact, health-care rationing occurs every day in the U.S., in thousands of big and small decisions, made mostly out of sight of patients, according to rules that often aren't consistently applied.

The people who make these decisions are harried doctors, Medicaid functionaries, hospital administrators, insurance workers and nurses. These are the gatekeepers of the American health-care system, the ones forced to say "no" to certain demands for treatment.
"The Big Secret in Health Care: Rationing is Here"  Wall Street Journal, 9/12/2003
This book is an excellent place to start for those interested in understanding health care costs, I strongly recommend.

Disclosing Drug Payments

The ACA was derided in part because of its length and complexity.  Funny thing is, the more we see of the health care reform the better it looks.  Here is one small measure packed into it that means a lot:  mandatory disclosure of payments to doctors from drug companies regardless of how it is accounted for.  Sales, research, kickbacks, whatever.  All of it will be subject to public review, so you can judge for yourself how closely your doctor's interests coincide with your own (at least when it comes to prescription drugs).  That might not seem like a lot until you realize you can't do that now, efforts of ProPublica not withstanding.

One of many ways the ACA reforms healthcare in America.

Monday, January 16, 2012

Great Quote on leadership

A great quote from Don Berwick, cited in Money-Driven Medicine (it can also be found here):
"The leader who thinks it is enough to create report cards and contingent rewards misses the biggest and hardest opportunity of leadership itself- to help people discover and celebrate the meaning in their work."

That rings true on so many levels it makes my head dizzy.

Friday, January 13, 2012

More on property tax dilemma

Portland Tribune has a story covering the mayor of Tigard's annual address.  He lays out the situation plainly (emphasis mine),

Many cities and counties across the state are in financial trouble, Dirksen said, and the problem isn’t because of the still struggling economy.
“The problem is caused by a fundamental problem with the way tax revenue is collected in Oregon,” Dirksen said. “Not the overall tax rate, but the process.”
Part of the problem, Dirksen said, is Measure 50, the Oregon law passed in 1997 that limits the rise of a property’s maximum assessed value to no more than 3 percent per year.
But while the state is taxing homes at the same rate each year, the cost of doing business continues to rise.
Though the assessed value only rises by 3 percent, the municipal costs increase in Tigard by about 4 to 5 percent in order to provide the same level of service as we did the year before,” Dirksen said.
This is the same problem ECONorthwest wrote about, it is why every municipal budget discussion in Oregon amounts to a question of "what will we cut this year".  The only way to grow revenue faster then 3% is to either impose new use-based fees or allow development to reset property values to a higher (much higher) value.  Remember this when someone tosses around the idea of another historic preservation district.

Retainer Medicine

I was surprised to see this press release from DCBS, I don't recall any public discussion of how retainer services would be regulated during the last legislative session.  The registration asks for a business plan with specifics on how and when prepaid fees would be subject to refund, and a filter-type question on bankruptcy.  Some thoughts:
  • What is to stop doctors from offering contracts that bar refunds under any condition?  Conceivably people could be paying up to a year's worth of fees up front.
  • Who is buying these contracts?  Are they well-to-do people who are buying luxury, or is it low income people with cat coverage?  The lack of regulatory specifics suggest this is aimed at the former group, but some material suggests the latter.  If so the regulations are way too weak, see "predatory lending" for how that story ends.
  • What protection is there against a doctor blowing all the money up front, or conversely taking on an arbitrarily large number of patients and never being available for appointments?
One could argue that consumers need no more protection from retainer medicine then they do from plumbers or electricians, but there is a big difference.  Society teaches us to be skeptical of contractors, from the adage about getting multiple quotes to fear stories about scams and rip-offs.  We don't have the same skepticism of doctors, quite the opposite.  People are taught they should listen to their doctors and do what they say.  That can lead to all kinds of conflict of interest situations even when the financing is at arms length via insurance, how does this work when the money is front and center?

Thursday, January 12, 2012

What life looks like without effectiveness research

Via healthcare economist, a gooznews post on why patient advocacy groups are unlikely to promote comparative effectiveness research even though such concerns are of central interest to patients.

Compare the crying need that gooz describes with the mission of PCORI as described by its Chief Operating Officer:
Q: Can you give an example of how you envision people using the kind of research that PCORI will fund?
A: Let’s say someone is trying to decide if they should have Procedure A versus Procedure B. You give them all this information, but what the patient is saying is, "Well, what’s really important for me is that I’m very afraid of pain. What procedure is going to be the lowest pain option that still gives me the benefits that I need?" Somebody else is going to be very interested in what will give them the longest life. Somebody else may say, "Well, what’s really important to me is whatever procedures I have, I am a working parent and I can’t really afford a lot of time off from work, so what procedure is really going to take care of this condition, but get me back to work as quickly as I can?"
So, then we [at PCORI] are trying to think of the different options that are available to us, not only looking at research that says, "If you do this cardiac procedure versus this cardiac procedure, here's what the outcome is." But now: here’s what the outcome is in terms of pain, here’s what the outcome is in terms of days off from work, here’s what the outcome is in terms of longevity. So then you, as the patient, have the information to make that comparison and make really a tailored decision that meets your needs.
There are a lot of problems in health care, but it isn't like we can't solve them.  We just have to learn how to ignore yahoos who get in the way.

Monday, January 9, 2012

Good Quote on legal challenges to Health Care Reform

The Times ran an op-ed refuting some common arguments against the legality of the individual mandate.  I thought this quote was particularly good (emphasis mine).
Opponents of the new mandate complain that if Congress can force us to buy health insurance, it can force us to buy anything. They frequently raise the specter that Congress might require us to buy broccoli in order to make us healthier [...]
That certainly sounds like a stupid law. But our Constitution has no provision banning stupid laws. The protection against stupid laws that our Constitution provides is the political process, which allows us to toss out of office elected officials who enact them. This is better than having unelected judges decide such policy questions, because we cannot toss the judges out if we disagree with them.
Nor are all required purchases stupid. It is not stupid to require us to buy air bags for our cars and pensions for our retirements. Nor would it be stupid to require us to buy life and disability insurance to make sure we have provided for our children. Whether the law should is up to our political process, not judicial second-guessing. 
 This gets at one of the reasons I find the conduct of congressional Republicans so inexcusable.  They claim to be serious about reducing the deficit and managing long term liabilities, but they are utter cowards when it comes to building actual legislation.  Their preferred approach is to find a bomb (payroll tax cut, debt limit, federal budget) and threaten to set it off unless Democrats pass their legislation for them.  Republicans do none of the hard work of gaining support through compromise, they consign that to "not my problem" status.  The thing is, making political choices is exactly their problem, that is what they are supposed to do.  If they want deficit reduction then come up with a deficit reduction package that can get the needed votes and pass it.  It may or may not be popular, but casting such votes and living with the consequences is the core definition of their job.

I've criticized Occupy protesters for not understanding civics, but at least they have the excuse of being joe-schmoe citizens.  What excuse do Republicans in Congress have for not understanding their job description?

H/T White Coat Notes

Thursday, January 5, 2012

Green Castle Wins

Green Castle won their land use appeal against BDS over the zoning decision that shut down the cart pod.  Some notable points:

-  The Hearing Officer rejected the 1987 neighborhood action plan as mostly irrelevant:
[what should be considered is] the character of the neighborhood as it exists today, not how it may be envisioned in the future by an adopted area plan. For this reason, the Hearings Officer disagrees that the Kerns Neighborhood Action Plan can be a criterion for approval in analyzing whether the proposed food court fits into the residential character of the surrounding neighborhood. Such area plans, however, can constitute some evidence of the existing character of the neighborhood and provide an indication of whether an adjacent residential area will remain residentially zoned over time. Here~ the 1987 Kerns Neighborhood Action Plan, which is admittedly outdated, indicates that the residentially zoned lands near the subject property are likely to remain residentially zoned at least into the near future. Other than that, the area plan is not very helpful in this analysis.
Do you know what your neighborhood action plan is?  Do you know who wrote it?  Are you comfortable with someone making any decision of consequence based on it?  Score one for common sense!

-  The officer then goes back to Websters Dictionary(!) to get a working definition of "residential character".  Based on that,
it is reasonable to read the concept of"residential character" as used in 33.25S.0S0.B.2 to mean the distinctive quality of the place where people dwell and live. For this reason, the Hearings Officer concludes that for the purposes of complying with 33.25S.0S0.B.2, the "residential character of the * * * R zoned area" cannot be determined solely by looking to the zoned use of the residentially designated buildings in the vicinity of the nonconforming situation. As described more fully below, it is reasonable to examine the residential area's  proximity to other uses such as existing commercial uses to determine the "character" of the residential area, and to determine whether the appearance of the proposed change in the nonconforming situation conflicts with that character. 
Score TWO for common sense!  You can't understand the character of a neighborhood without actually looking at... the neighborhood.  The whole neighborhood, warts and arterial traffic and other zoning uses and all.

- Finally, the officer acknowledges that neighborhood opinion should matter:
...the analysis is not as dependent on definitional limits as BDS Staff seems to conclude, but is determined primarily by substantial evidence. Here, the preponderance of substantial evidence strongly supports the Appellant. At the hearing, several parties submitted uncontroverted testimony that the "appearance" of the commercial parking lot before the food carts arrived was very undesirable. Those parties stated that illegal camping, litter, and illegal dumping were occurring and that the parking lot had an unkempt look. In contrast, the parties described the food court, while it was in operation, as clean, well kept and well lit. Their testimony indicated that illegal dumping and camping had ceased, and that the food court generally had a pleasant appearance.  The Hearings Officer views this testimony as substantial evidence that the appearance of the food court is considered a benefit or amenity to the surrounding residential area.
And he hits the trifecta!

The appeal finding pretty much refutes everything that made the initial BDS decision so bad.  Voices of today should count while those from 1987 should not.  Boundary lines that exist only on zoning maps shouldn't be taken to arbitrarily limit what constitutes a neighborhood.  Cheers to the Hearings Office and Green Castle!

As the swallows return to Capistrano...

so Republicans rush to defend ineffective medicine.  What is it with these guys?  The PPACA funds the Patient Centered Outcomes Research Institute (PCORI) with a $2 per person per year tax on health insurance policies.  $2 a year is about half the cost of a latte and about 1/200th of the cost increase in the average annual premium for an individual from 2010 to 2011.  That's really not that much to pay to avoid having your (or someone you love's) hip shredded, or to avoid an unnecessary radical mastectomy.  Think about it...

Tuesday, January 3, 2012

Doctors weigh in on PPACA

Via Health Care Finance News, Deloitte published a study of physician views of PPACA.  In case you were confused about who the bad guys in health care are:

So most surgeons think US healthcare is good or excellent while most of everyone else does not, most surgeons think they will make less money because of Obama's reform while most of everyone else does not, and unsurprisingly most surgeons think the Obama reform is a step in the wrong direction while most of everyone else does not.

Maybe I've been reading too much of Maggie Mahar's chapter on Tenet, but I wouldn't trust a surgeon any further then I could throw one.

Monday, January 2, 2012

Suburbs vs. the City

In commenting on a recent editorial, I tried to highlight what I think is a serious blind spot in popular notions of urban planning and sustainability.  In Portland, much thought and effort is directed at "livability."  Few of those efforts though are targeted at families, and in fact measures such as the composting program seem intended to push families out.  I wanted to put some numbers on migration, so I looked at the 2009 ACS data.  I compared figures for the city of Portland to the Portland-Vancouver-Beaverton MSA minus the city of Portland, taking the latter group as an approximation for suburbs.

The data tells an interesting story.  Series 1101 gives total households, families, and families with children under 18 split into three subsets:  Families with children under 6, families with children both under and over 6, and families with all children 6 or older.
At the outset there is an obvious difference in the number of households reported as "families", unsurprisingly singles tend to be attracted to the city.  And at first glance there isn't much difference between city and suburbs when it comes to how many families have kids, 46% vs 49%.  The net result is that suburban households are significantly more likely to have children, one third vs less then a quarter in the city.

Things get weird when you get into the age groups.  The percentage of households with young children is very close, only half a point separates city and suburb.  The difference is concentrated in families with older children:
Now some might construe this as evidence of a shift in preference, that newer parents are more comfortable raising kids in the city and its only a matter of time before the figures for households with older kids come into line. So I looked at 2005 ACS data:

This pattern isn't new.  What it speaks to is a transition, that as children age families are more likely to pack up and move out of the city.  How many people are we talking about?  If Portland had the same share of families with older kids as it has of families with younger kids it would mean an extra 13,355 families.  Averaging that over 18 years and it comes out to 742 families per year.  That's 742 families who tried living in the city, put up with it for at least 6 years and then decided to do something else and embraced suburban car culture.  Each year.  That was the status quo.

Now think about the composting program and how the city gave the functional equivalent of a raised middle finger when people asked what they were supposed to do with diapers.  How many more families will boogie off to the burbs?  The city has a grace period because families are trapped by the rotten housing market but that won't last forever.  Eventually families will regain a choice in housing, and no one should be surprised when they act on it. 

How sustainable is a vision of the city that drives families out into the suburbs?

Interesting New Years Healthcare Retrospective

by John McDonough.  He touches on the irony of  the potential rebirth of provider rate regulation on the 20th anniversary of its execution.  He condenses decades of history into a paragraph:
In the late 1980s, reducing the size of the hospital system was an unattainable policy obsession, and in the 1990s, the deregulated market made it happen with stunning efficiency. This is a clear-cut case of "be careful what you wish for, because you just might get it." While the downsizing eliminated excess capacity, it also enabled market consolidation triggering widespread hospital payment and health insurance cost inflation over the last ten years.
 I wish Oregon had someone of his caliber and commitment to public engagement writing about healthcare.  What could such a person tell us about Kitzhaber, about CCO's or the insurance exchange?

As a followup question, that's the first reference I've seen to a  perception in the 80's of excess capacity.  What's that about?