Thursday, March 12, 2015

America's Bitter Pill by Steven Brill (Book Review #22 of 2015)



America's Bitter Pill: Money, Politics, Back-Room Deals, and the Fight to Fix Our Broken Healthcare System
Brill is a writer for TIME and wrote the seminal article on the Affordable Care Act, consuming an entire issue of the magazine, in 2014. This book was largely a result of his research for that article and his own experience, being hospitalized with a heart aneurysm and experiencing the "broken" health care system first-hand. Brill was given access to many in the White House, including President Obama, who wanted his "voice" to be part of the book. The book is the best history of the still-young ACA yet written.

I work in an office of the Commonwealth of Kentucky that looks frequently at Medicaid. I was pleasantly surprised that Brill wrote so much about Kentucky's expansion in this book, several chapters. He juxtaposes Kentucky's competent rollout of Kynect with the federal government's Healthcare.gov disaster. He does not, however, delve too far below the surface of the decisions Kentucky policymakers and implementers faced. The Governor, the Cabinet for Health and Family Services, and the directors of KYNect come across very positively in the book. Brill neglects the political implications of Gov. Beshear's executive order, bypassing the legislature. He also could have strengthened the book by comparing Kentucky's border states and their hesitations and the political battles that have ensued there.

Lest people forget what the impetus was for reform, over 60% of bankruptcies in 2013 were largely a consequence of medical bills, up from 8% in 1981. There was much hostility toward insurance plans that capped what an insurer would have to pay out for any individual, a real problem for those facing medical crises. Brill highlights the "corrupt" system with non-profits that are quite profitable, the "charge master" lists of the exhorbitant prices hospitals charge for supplies ($70 for a $1.50 pack of gauze, etc.) and the "discounts" negotiated with insurers.

From wikipedia:
"Brill claims patients receive bills that have little relationship to the care provided and that the free market in American medicine is a myth, with or without Obamacare...Time magazine's managing editor Rick Stengel wrote: "If the piece has a villain, it's something you've probably never heard of: the chargemaster, the mysterious internal price list for products and services that every hospital in the U.S. keeps. If the piece has a hero, it's an unlikely one: Medicare, the government program that by law can pay hospitals only the approximate costs of care. ..."

Brill's history of the problem essentially begins with WWII, when the Supreme Court ruled health insurance were not wages and therefor not subject to taxes nor wage/price controls. This gave employers an incentive to provide an increasing amount of insurance as compensation and a flood of insurance providers into the market. The U.S. is the only Western country to require employer provision of insurance.

He takes a brief look at the politics of the 1990s, from the early Heritage Foundation recommendations that citizens be held "responsible" to buy private health insurance, to Jon Gruber's analysis of the consequences of various health care changes, which got the attention of Gov. Mitt Romney. Brill outlines some of the ways Romneycare and Obamacare are similar, but does not do a good job showing how they're different. The penalties under Romneycare are much less, and tax deductible, for example.

Obama's initial foray into health policy came at a debate in Nevada when he was an underdog in the Democratic primary. Obama seemed a bit clueless and didn't say anything substantive. Others, like Jonathan Gruber, who had met Obama knew him to be at least knowledgable on the subject (Gruber stayed out of the campaign but later, famously, helped put together the ACA). Eventually, Obama's evolution worked out for him-- but the legacy of him opposing the McCain/Republican-proposed tax credit for the purchase of private insurance came back to haunt him, as did his criticism of Hillary Clinton's preference of a mandate.

In Obama's first term he had a crack health care policy team, but Sen. Max Baucus was negotiating his own health care bill. Ezekiel Emanuel got a seat at Obama's table because of Rahm Emanuel, and other wonks like Larry Summers and Peter Orszag also contributed. The hold-your-nose negotiations with Republicans like Mary Landrieu  This dynamic is interesting, and I hope Chuck Todd's book The Amateur does a better job detailing the wrangling.

Interestingly, the goal was always to eliminate bad insurance policies, yet when it came to millions of these inferior policies being cancelled due to changes in the law, the Administration was suprised and angry. Obama caved under the Republican's repeating ad nauseum his "if you like your insurance, you can keep it." That was never true, never intended to be true, yet somehow surprised Obama when it actually happened. This happened during the healthcare.gov rollout meltdown, which was already an embarrassment. "You guys figure it out" was apparently Obama's leadership style in this project. By the time of the launch, many of the architects had already left for the private sector, exacerbating the problem.

Brill hears from multiple parties that Valerie Jarrett filtered complaints and warnings about the healthcare.gov building process from reaching Obama. "The President wants to hear your solutions, not your problems," they were told. Brill asks Obama specifically about this and the President refused to answer. Obama remained focused on the publicity-- making sure young invincibles enrolled. "Enroll America" was a group of secret donors working hard to promote the new health coverage. After meetings he is quoted as saying "But none of this matters if we don't get the technology right," but it's not clear he had met with anyone working on the machine. Part of the problem is that there was no one in charge, there were multiple agencies and contractors tasked with multiple moving parts. On the day of the launch, Healthcare.gov was only able to handle 10,000 users at a time while being overwhelmed with multiples of that. By contrast, Kynect alone was capable of handling 30,000 users-- just one small state. Brill writes that Obama questioned stakeholders individually, "no drama Obama," and some withered under his calm questioning. In the end, he appoints a "health care czar" and things seemingly improve.

Brill's later chapters deal with the heart aneurysm. He notes that for all of Kentucky's health care strengths, the system is still not transparent enough for heart patients to compare the results and ratings of surgeons, like he can in New York. Brill tries to make sense of his bills, notes the chargemaster numbers and discounts. He even sits down with United HealthCare's CEO who can't make sense of the bill. Even the CEO doesn't understand the "basic communication he sends to customers," and that problem hasn't been fixed by Obamacare.

Brill concludes that while basic medical care is made more readily available for Americans by the law, it still doesn't solve the fundamental problems of health care delivery. Brill's thoughtful solution is to see hospitals become insurance companies, be one conglomerate with price caps and caps on CEO pay and potentially profit. Regulate them like monopolies with anti-trust laws, require that there be a certain number of providers in various locations (New York City might have 5-6, for example). This would cause hospitals to get rid of the "chargemaster" list which CEOs admit is an archaic relic. This would also help do away with the fee-for-service problem. More transparency about prices would lead to better choices and competition. Real innovators and cost cutters could find profit. It's novel.

In all, I give this book 3.5 stars out of 5.

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