Book Club -- The Why Axis – how economic incentives work in the real world

In the latest addition to the CT Health Policy Project Book Club -- They Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life – the authors believe that findings from economic experiments conducted in labs with undergraduates playing symbolic games do not translate into actionable lessons for the real world. Gneezy and List describe their messy, labor intensive but far more accurate real world experiments complete with control groups and direct outcome measures. They’ve looked at whether paying students, parents and/or teachers for better performance works (it does), paying employees for healthy behaviors saves on health costs (it does), how to reduce discrimination in markets (tell them you are getting more estimates), does a nutrition education program get kids to choose healthier foods (it doesn’t, but prizes work), and how to structure incentives and choices to maximize impact. A fascinating book that ends with a strong call to include experiments in any endeavor. Too many policies are set based on intuition or extrapolation from another setting, and we end up scratching our heads later not sure if it worked, or wondering why it didn’t. A good way to spend a snow day.

Exchange active purchasing bill has a public hearing

The legislature’s Insurance and Real Estate Committee has raised SB-11, An Act Concerning the Duties of the CT Health Insurance Exchange, and will hold a public hearing on the bill next Tuesday. SB-11 requires the CT Health Insurance Exchange to active purchase health coverage for the estimated one in ten state residents who will purchase health insurance there. The bill directs the exchange to negotiate premiums with insurers to keep insurance affordable for the individuals and small businesses. Last year’s bill for the same purpose was approved by the committee, passed the Senate but died on the House calendar. The exchange Board and staff rejected active purchasing, claiming it would be “too adversarial” toward insurance companies. As predicted, CT’s insurance exchange premiums are 4^th highest in the US, higher than all other state-based exchanges, and far higher than higher cost of living, surrounding states that negotiate premiums on behalf of consumers.

The public hearing on SB-11 will be this Tuesday, February 18th at 11:30pm in Room 2D of the Legislative Office Building. Sign up begins at 9:30am in Room 2800 of the LOB, where you can deliver 30 copies of written testimony for distribution to committee members.

SIM update – answers, sort of, and further delays in starting work

On Monday, advocates received answers to our questions about the SIM final plan – sort of. We did learn that they are not considering pure capitation as a payment model at this time and that any plans for Medicaid payment changes will go through the Medicaid Council – both good. Unfortunately answers to the other consumer concerns were kicked down the road to the workgroups. We also learned in Tuesday’s Health Care Cabinet meeting that creation of those workgroups will be significantly delayed. That includes the Equity and Access Committee charged, among other things, with developing a monitoring plan for under-treatment. The final SIM plan acknowledges that savings may be generated in some cases by inappropriate under-service and denying people needed care, as happened under managed care in the 1990’s. After lively debate, the plan’s final language does deny shared savings payments that were generated at the expense of necessary care, but not before the incentives are in place, as urged by advocates. The plan sends responsibility for creating that system of underservice monitoring to the Equity Committee, which is delayed indefinitely. SIM has been criticized by advocates and others for a questionable, opaque process of, among other things, choosing members of decision-making committee members, especially the payer-dominated Steering Committee. At a meeting called by SIM staff for suggestions on governance, advocates and consumers voted to make consumers and advocates constitute at least 51% of all workgroup membership and for those members to be chosen by consumers and advocates, as is done in other highly successful CT policymaking forums. The usual convention for other stakeholder groups is to ask their trade association for names for committees (see below). However, the “new” plan for appointing members to the new workgroups is for staff to develop a proposed structure with limited consumer/advocate slots, send it to that same questionable Steering Committee for approval, then seek nominations from advocates, consumers and other stakeholders for those limited spots, then the same SIM leadership will make recommendations for membership, and send them again to the same Steering Committee for approval. Advocates are concerned that this “new” process just puts additional layers on the “old” process, and creates an unnecessary delay in developing consumer protections.

In more SIM news, the participant list for last month’s SIM meeting in DC is online. Four CT hospital reps, the CSMS, and Commissioner Mullen attended along with DSS, OHA and SIM staff.

New exchange numbers – good news but lots of questions

CT’s health insurance exchange has enrolled 121,983 people into coverage, exceeding next month’s goal. In other good news, CT is beginning to catch up to other states in Medicaid enrollment – 71,318 (58%) of those enrollments were into Medicaid, 22,335 (31%) of those would have qualified for Medicaid without the ACA. The exchange estimates that only 10 to 15% of those enrolled in exchange plans were previously uninsured, raising questions about whether CT’s uninsured rate will drop as much as expected. Other unanswered questions crucial to evaluating the success of the exchange include the ages and health needs of exchange enrollees and the adequacy of the provider network. A bill has again been raised this session to address another serious shortcoming of the exchange – CT has the 4^th highest premiums in the US, higher than any other state-based exchange. The bill, SB-11, would direct the exchange to negotiate premiums with insurers. States that negotiate premiums offer lower premiums to their customers. The state should pursue this and every other option to keep coverage affordable for CT residents.

Yale Law Student conference on exchanges

Saturday the Yale Health Law & Policy Society held a fascinating conference on health insurance exchanges – early challenges and opportunities. Speakers included academics, advocates, state officials and private consultants. Focusing across the US, speakers highlighted the differences between states, and between the federal exchange, state-run exchanges, and the models between those two. Speakers addressed concerns about the ages of early enrollees (whether too many older, presumably more expensive members, could create a death spiral), disappointing enrollment numbers (and lowering expectations), market influences – inside and outside exchanges, the politics of exchanges, legal challenges (this was really entertaining – legislators can be very creative in undermining a federal law they don’t like), churn how it affects insurer incentives, the power of choice architecture, how exchanges fit into the bumpy landscape of ongoing delivery and payment reforms, affordability (or the lack of it), the expanding list of states expanding Medicaid through exchanges and premium assistance, states blocking navigators and consumer assistance, best practices in outreach, and a lot more. Smart speakers and great student questions -- I learned a lot. 

Press on Governor’s budget and health

Press accounts hold more information on the Governor’s budget including what’s not there – relief for hospital cuts in previous years.

Health and Human Services, A Mixed Bag, CT News Junkie

Home care, Medicaid pay, inmate health care in Malloy proposal,  CT Mirror

Governor’s budget update proposal

The Governor’s midterm budget adjustment proposals include maintaining the increase in primary care provider rates that began last year costing the state $15 million in FY 2015 and $36 million in future years. The Affordable Care Act provided full federal funding to cover the cost of those rate increases for 2013 and 2014 only. Those rate increases have been critical to improving provider participation in the program. Advocates were concerned about sustaining improved access to care if the rates dropped back to lower levels.

The Governor also added significant funding for the SIM project adding $3.2 million to the Office of Health Care Advocate to hire 10.5 positions and $65,000 to the Office of State Comptroller for one new position. The administration intends to move forward with SIM payment and delivery model changes regardless of whether CT is awarded more federal funds. This would more than double the Office of Health Care Advocate’s budget.

The Governor also proposed $3.1 million in new funding for a Governor’s Mental Health Initiative including rental assistance, supportive services, crisis intervention training for law enforcement personnel, and an anti-stigma campaign.

The Governor also proposed enhancing fraud detection and enforcement, adding two positions to the State Dept. on Aging, expanding the Katie Beckett waiver to serve children with severe disabilities, and expanding the CT Home Care Program for Adults with Disabilities. He also proposed exempting non-prescription drugs from sales tax.