Category Archives: Health Care

Rural Virginians Will be Really Old by 2040

Image credit: StatChat. Click for more legible image.

Like every other state in the union, Virginia’s population is getting older. The trend is particularly pronounced in rural jurisdictions, as seen in these maps compiled by Shonel Sen with the Demographics Research Group at the University of Virginia and published in the StatChat blog.

Everyone seems so focused on immediate problems that localities have given little attention to what things will be like in 23 years when the 65+ demographic comprises more than 20% of the population across most of the state. Given the inability of most Baby Boomers to accumulate much wealth, how many of these elders be poor? Given the tendency of young people to move away, will the rural elderly have caretakers? Given the pressures on rural hospitals and the increasingly acute shortage of doctors, will the elderly have adequate access to health care?

I suppose it’s human nature to ignore distant problems until they become immediate problems, so I’m guessing nothing will be done until these issues reach crisis proportions. This is America. That’s how we roll.

The Terrifying Power of the Media to Shape Opinion

Only 18% of Americans support the U.S. Senate healthcare bill to replace Obamacare, says one poll. Only 12%, says another, and only 8% says yet another. Given the slow-motion collapse of Obamacare, that’s remarkably low. With numbers that low, even a majority of Republicans must oppose the bill.

Could the public’s negative opinion be shaped by the fact that the media has overwhelmingly portrayed the bill in overwhelmingly negative, even apocalyptic, terms?

A big drawback of the bill is that health care insurance would be more expensive for older Americans. I Googled the phrase, “Senate healthcare bill more expensive for older adults.” Every article cited on the opening page stressed the harm that the bill would do to seniors. Seventy-five percent of Googlers never go past the first page of results. To find countervailing analysis, searchers would have to dive way deeper into the results.

An offsetting benefit is that the bill would make health care insurance cheaper for young adults and free them from the Obamacare mandate of purchasing insurance. So, I Googled the phrase, “Senate healthcare bill cheaper for young adults.” The opening page was a mixed bag. Some results were balanced and some negative. None were positive. Here are the headlines:

9 Things To Know About The Senate Health Care Bill (NPR). The article notes, “The oldest people under 65 can be charged five times more than the youngest, and maybe more depending on state rules.” It says nothing about young adults paying less.

How the Senate’s Health-Care Bill Would Cause Financial Ruin for People with Preexisting Conditions (Atlantic). The headline speaks for itself. The article doesn’t even address the issue of how young people are impacted.

Winners and Losers of the Senate’s Health-Care Bill (CNBC). This article does acknowledge that young adults would benefit: “The Senate plan, like the House bill, would give insurers greater flexibility to charge younger enrollees much lower premiums and to offer skinnier plans in states that opt out of ACA’s essential health benefit requirements.”

The Senate health care bill: What’s in it and what to watch for in the CBO report (Politifact). This article provides a balanced statement: “Today, companies can’t charge older customers more than three times what young adults pay. The Senate bill increases that to five to one. This change reduces premiums for the young and increases them for those in their 50s and early 60s.”

Senate health plan falls short of promise for cheaper care, experts say (New York Times). The Times article presents a uniformly dismal view of the bill, noting no positives of any kind.

Senate Health Bill Includes Deep Cuts to Medicaid (New York Times). This Times article tells how older Americans would be disadvantaged under the bill but ignores the offsetting advantages to younger Americans. “Older people could be disproportionately hurt because they pay more for insurance in general. Both chambers’ bills would allow insurers to charge older people five times as much as younger ones; the limit is now three times.”

The Senate health bill is brutal on older Americans (Slate). The first paragraph in this Slate article is as balanced as it gets: “One of the expressed intentions of Republicans’ efforts to repeal and replace Obamacare is to undo some of the age-related distribution inherent in the system. Today, healthy young people pay more so that older, less-healthy people don’t have to pay quite as much.” Then Slate goes relentlessly negative for the rest of the article.

Comparing the Senate health care bill to Obamacare and the House proposal (CNN). This CNN article does note that the Senate bill will repeal the mandate for adults to obtain health insurance or pay a penalty.

Senate health care bill would lower deficit, increase number of insured, estimate says (FOX). The Fox article addresses pros and cons of the bill, but nowhere does it mention how the bill would lower premiums for young adults.

The Senate health-care bill’s subsidy cuts hurt low-income, older Americans (Washington Post). While the headline is negative, the article itself is more balanced, acknowledging that young people would benefit from allowing insurers to base rates on age. “Both [the House and Senate] bills include changes that would mean older people pay more and younger people pay less.”

Summary: The results on a search inquiring about a negative aspect of the bill brings up uniformly negative and critical articles. The results on a search inquiring about a positive aspect of the bill brings up a mix of negative and balanced articles — but no positive articles. Continue reading

Would U.S. Senate Bill Devastate Virginia’s Medicaid Program?

In a preliminary analysis, the McAuliffe administration estimates that the U.S. Senate’s proposed Obamacare replacement bill would cost Virginia’s Medicaid program at least $1.4 billion over seven years. “The legislation currently up for a vote in the United States Senate would blow a hole in Virginia’s budget and severely impair our ability to offer health coverage and long-term care to the people who need them most,” said Governor Terry McAuliffe in a statement released yesterday.

The per capita caps in the Better Care Reconciliation Act of 2017 affect almost every population covered by Medicaid, and would cost Virginia’s program almost double the $708 million that the House-proposed American Health Care Act (AHCA) was estimated to cost over the same time frame, stated the governor’s office.

The difference between the impact of the House and Senate proposals on per capita caps lies in the “annual growth factor” – the estimation of how much costs will increase in the future over a baseline estimate of Medicaid spending. The Senate bill uses a growth factor that estimates lower growth than the House bill – and both houses use a growth factor that is arbitrary. DMAS estimates costs will outpace the growth factor of both bills; that change becomes more pronounced in later years. Provisions in the BCRA that provide safety net funds to providers and eliminate Disproportionate Share Hospital allotment reductions would not directly make up for the losses Virginia would experience from per capita caps.

According to Michael Martz with the Richmond Times-Dispatch, the estimated loss in federal support in Virginia would jump from $117.2 million in fiscal year 2024 to $327.9 million the next year, and then to $493.5 million the year after that.

Bacon’s bottom line: If this is a fair summary of the impact of the Republicans’ proposed health care reform legislation, then it’s a big deal. It would blow a nearly $500 million hole in the state budget for a Medicaid program that is already one of the most austere in the country.

But let’s look a little closer. The McAuliffe administration says that the Senate and House GOP “annual growth factors” are arbitrary. And perhaps they are. But I would like to know what the McAuliffe administration’s cost escalator is, and what assumptions it is based on. How do we know that it is any less arbitrary? As I understand the Republicans’ logic, the Senate bill would generate savings by giving the states more latitude in how they administer Medicaid. Is it inconceivable that Virginia could run the program more cost effectively than it’s being run at present?

I’m not saying that the McAuliffe estimate is wrong, but I do think we need to subject it to some scrutiny before we accept it as valid.

Bacon Bits

I’m on jury duty today, so I won’t have time for blogging. But very quickly, a couple of articles worth noting….

Fraudulent graduation rates. In Prince George’s County, Md., four members of the school board have asked the governor for an investigation into what they allege is a systemic effort to fraudulently boost graduation rates in the Maryland school district, reports the Washington Post. “Widespread, systemic corruption” has inflated graduation rates since 2004, they say.

Of course, that’s Maryland, not virtuous Virginia. Such institutional chiseling could not possibly happen here! The steady increase in graduation rates in Virginia schools is due entirely to the extraordinary efforts of teachers, administrators and students!! Still, citizens and school board members should be alert to the possibility, as remote and implausible as it sounds, that similar chiseling occurs in our own school districts.

Health system profits still healthy. We’ve been hearing for years how the profits of Virginia hospitals, though hefty today, are subject to erosion by the buffeting storms of Obamacare and other forces. Yet the profits of our health systems seem to be holding up nicely. The latest evidence comes from Carilion Clinic in Roanoke.

“Carilion Clinic on Monday released financial statements showing continued improvement for both its operating margin and bond ratings that could soon prompt it to make public its plans to expand Carilion Roanoke Memorial Hospital,” reports the Roanoke Times.

After losing $131 million between 2008 and 2011, Carilion earned $69 million on $1.65 billion in revenue during fiscal year 2016, giving it a 4.2% operating margin. Moody’s affirmed an A1 rating and upgraded Carilion’s outlook from stable to positive. Standard & Poor’s moved Carilion’s rating upward from A+ to AA-.

Carilion provided $67 million worth of services to people who could not afford them during 2016. This was up about $15 million over 2015.

The Obamacare Death Spiral Proceeds as Predicted

Who knows whether or not Republicans will get their repeal-and-replace of Affordable Care Act through Congress. From the commentary I’ve seen (mainly on “Morning Joe”), the odds seem remote that the Senate will approve whatever the House of Representatives sends their way. In the meantime, we are left with the Obama state exchanges.

The picture just turned more ominous here in Virginia. Innovation Health, which health insurer Aetna created through a joint venture with Inova in 2012, is dropping out of the Virginia market. In addition, United Health has declined to file with Virginia’s insurance department to offer any policies next year, reports CNN Money.

That leaves six insurers remaining, but 27 counties will have only one choice in 2018.

The death spiral is corkscrewing away. Less competition means higher prices. Higher prices drive healthier people out of the market. A higher percentage of sick people runs up costs. Insurers raise rates or drop out. Less competition means higher prices….

There’s not much we can do here in Virginia to affect the outcome of Congressional debate. But there is plenty we can do to make health care more affordable, improve outcomes, and to bring price transparency to the health care system. If we want to make health care coverage affordable for Virginians, lawmakers should focus on ways to improve productivity and innovation. I know I sound like a broken record… broken record… broken record… So I’ll leave it at that.

Eat Your Brussell Sprouts!

Richmond’s Gwarbar: Food your friends will literally die for.

Richmond has a reputation as a great foodie town with more than its fair share of organic, locally sourced ingredients. But great food doesn’t necessarily translate into healthy food. Richmond ranks 161st out of 189 metropolitan regions nationally for “healthy eating,” according to the 2016 Community Rankings for Healthy Eating survey conducted by Gallup Sharecare. That was the lowest score of any Virginia metro.

The healthiest Virginia community? Charlottesville. Of course.

The methodology was not what you’d call scientifically rigorous. The ranking, based upon the question, “Did you eat healthy all day yesterday,” actually gauges perceptions of healthy eating. It’s not clear how much the answers were influenced by how different communities define “healthy” eating — who says french fries topped with cheese and chili aren’t good for you? Or how much answers were affected by local cultural expectations — a little extra padding is good for you. You never know when you might find yourself adrift at sea and really need it!

But for purposes of argument, let’s assume there is a correlation between what people say they eat, what they actually eat, and how healthy they are. Here are the Virginia rankings.

21. Charlottesville
72. Washington-Arlington
78. Roanoke
113. Lynchburg
126. Virginia Beach-Norfolk
131. Kingsport-Bristol
161. Richmond

How Important Is Insurance to Health Outcomes?

The variability in health insurance by city and county accounts for 30% of the difference in health outcomes. What about the other 70%?

The variability in health insurance by Virginia city and county accounts for 30% of the difference in health outcomes rank. What explains the other 70%?

A dominant strain of political rhetoric tells us that having health care insurance is absolutely vital to maintaining peoples’ health and longevity. Without health insurance, people will die! The logic makes sense if one assumes that the United States (and Virginia) have a binary health care system in which people either (a) have health insurance (including Medicaid and Medicare), giving them full access to the health care system, or (b) lack insurance and receive no medical treatment. But in the real world, there’s a big fuzzy zone. Some insurance, frankly, stinks — limited choices, high deductibles and the like. And some uninsured people enjoy at least limited access to medical care at clinics, emergency rooms and hospital care.

On a lark — I honestly had no idea what results I’d get — I created a scatter graph comparing two data sets for 132 Virginia counties and cities. One comes from the StatChat blog: Health Care Coverage Across Localities in Virginia in 2015, based on data from the U.S. Census Bureau American Community Survey. The other comes from the Robert Woods Johnson Foundation 2017 County Health Rankings, which ranks city and county health outcomes on a basket of health quality and longevity metrics.

The chart above shows the results. As one would expect, there is a significant correlation — localities with lower percentages of uninsured working-age populations tend to have better health outcomes, and vice versa, higher percentages of uninsured populations translate into worse health outcomes.

But the R² coefficient is only .3044. That’s statistics-speak for saying that the variation in the percentage of the insured population accounts for only 30% of the variation in health-outcome rankings. (Note: that’s health-outcome rankings, not actual health outcomes. I readily concede that this is a quick-and-dirty analysis.) Thirty percent is significant, but it leaves a lot unexplained. Seventy percent of the variance is due to other factors.

The debate about health care in the United States over the past half century has focused mainly on expanding access to health insurance as a way of expanding access to medical treatment. But insurance accounts for maybe 30% of the problem. What about the other 70%? The Robert Woods Johnson (RWJ) attributes the following weights to different health factors:

  • 30% — health behaviors (tobacco use, diet & exercise, alcohol & drug use, sexual activity);
  • 20% — clinical care (access to care, quality of care);
  • 40% — social & economic factors (education, employment, income, family & social support, community safety);
  • 10% – physical environment (air & water quality, housing & transit).

Here in Virginia, Democrats are obsessed with Medicaid expansion, as if the percentage of population with insurance is the be-all-and-end-all of health policy. Unfortunately, Republicans have offered few reasons to oppose Medicaid expansion other than to emphasize the stress it would impose upon state finances.

Instead perpetuating this sterile debate out of partisan loyalty or antipathy to former President Obama’s signature legislative achievement, we should ask if we can make bigger gains in health outcomes at less expense than by expanding Medicaid. The RJW report gives heavier weight to personal behavior as reflected in smoking, substance abuse, sexual activity, nutrition and exercise. Perhaps the politicians should, too.

Probing the “Insurance Coverage” Numbers

Insurance coverage broken down by state.

Insurance coverage broken down by state. Chart source: StatChat

With Governor Terry McAuliffe making another bid to expand Medicaid via a budget amendment, the publication by the StatChat blog ten days ago of data on the extent of insurance coverage in Virginia couldn’t be more timely.

The blog post is content to present the data with little commentary or explanation of what’s happening, however, so I’ll try to fill in the gaps.

The good news is that in Virginia, more than 90% of the population has some form of insurance (including Medicare and Medicaid). The bad news is that 9.1% of the population still has no insurance coverage. And, despite a lower unemployment rate and a higher median household income than the national average, the percentage of the insured population hovers just at the national average.

By eyeballing the chart above, we can see that Virginia’s uninsured population bounced around the 12% mark for several years, then jumped ahead one or two percentage points after the implementation of the Obamacare health exchanges. One also can surmise that some states leaped ahead of Virginia in the rankings by extending Medicaid to the working poor while the General Assembly rejected the option.

These data would seem to back the McAuliffe narrative on the desirability of expanding the Medicaid program, 90% of the cost of which would be paid for by the federal government. If Virginia added just 5% of the population to the Medicaid rolls, the state would have a higher rate of insurance coverage than all but five states.

But dig a little deeper, and the picture gets more complicated. The chart above breaks down those with and without health insurance by age. Roughly two-thirds of the uninsured population is below 45 years old. This younger demographic segment tends to be considerably healthier than the older age cohorts, and its medical needs correspondingly less. Indeed, thousands likely opted out of the Obamacare exchanges because they did not need or want the coverage at the price it was available. Although we can’t tell from this data how many opted out, it is worth noting that some portion of Virginia’s 10% uninsured population is voluntarily uninsured.


Finally, it’s worth studying the map above, which shows the variation in the uninsured population around the state. (I would refer you to the interactive map at StatChat for details.) The uninsured rate in the working-age 18-to-64-year-old age cohort varies from 32.3% in the city of Manassas Park to 4.6% in the nearby city of Falls Church. Clearly there is a link between income, unemployment and insurance coverage. One could argue that the best antidote to uninsurance is a strong economy and high employment; if we want more people covered by insurance, perhaps we should be investing state funds in making people more employable.

But other factors are at play, although I’m not sure what they are. Why, for example, do the Interstate 81 corridor localities of Roanoke, Botetourt and Montgomery counties — not exactly known for a booming economy — have such low percentages of working-age uninsured? Are there unique institutional forces at work? It’s worth looking into.

Bacon’s bottom line: The debate over health care has gotten hung up on the number of uninsured. But that number is almost meaningless without considering the quality of the insurance programs.

For example, thousands of Virginians are “insured” through Medicaid. But what quality of care people do people receive when low reimbursement rates discourage 22% of Virginia physicians from participating, according to a 2016 Physicians Foundation survey? What percentage of Medicaid patients, unable to find a personal physician, routinely get their health care in hospital emergency rooms? And how does the quality of care compare to that provided uninsured people who go to emergency rooms and have their expenses written off as “charity” care or “uncompensated care”?

Another example: Thousands of Virginians have coverage through Obamacare health care exchanges. But what kind of access do they enjoy? Are they restricted to certain hospitals and physicians? How high are their deductibles and co-pays? To what degree, as a practical matter, has the quality of their health care improved? Likewise, how many Virginians forced into Obamacare lost their old insurance policies, how many lost access to their physicians, and how many perceive that they have worse insurance coverage than they had before? Nobody is generating that data.

One more point: How extensive is the safety net for the uninsured in Virginia compared to that in other states? Virginia has a fairly robust system of clinics that provide primary care to the uninsured and under-insured. How many people are getting at least some of their medical needs met through these clinics? How many are  slipping between the cracks? And what happens to clinic patients when they require treatment unavailable at the clinics?

Counting the percentage of the “insured” population provides a rough measure of access to the health care system. But there’s a lot it doesn’t tell us. Before undertaking a massive expansion of Medicaid at considerable fiscal risk to the commonwealth, we need a keener understanding of how Virginia’s health care system functions. We should not blindly accept the proposition that an expanded Medicaid program will improve real-world access to the uninsured. While the StatChat data is valuable for starting a discussion, it does not purport to tell us all we need to know.

Health Care as Entitlement for All

State involvement in health care can be traced back to 1773 when the "Public Hospital for Persons of Insane and Disordered Minds" opened in Williamsburg.

Virginia”s state involvement in health care can be traced back to 1773 when the “Public Hospital for Persons of Insane and Disordered Minds” opened in Williamsburg.

by Allen Barringer

For seven years now we have lived with “Obamacare,” the Affordable Care Act, and now we are engaged in rewriting it as the American Health Care Act, and, yes, it’s “all very complicated.” One thing already is clear: both Democrats and Republicans talk about “affordable, quality health coverage for all Americans” — but neither the ACA nor the proposed ACHA truly lives up to that description.

I understand that standards of health care are contentious. We don’t agree on what is “quality” or “adequate” care, let alone “humane,” and we don’t even agree how limited medical resources, such as transplantable organs, should be allocated. But until this year, I thought we did agree on equal access to whatever it is the government provides. If there is a health entitlement at all, it should be available to all.

Health care has long been a government responsibility. From medieval times, the established Church organized hospitals and administered the poor house and other components of the social safety net, while the King dealt with public sanitation, quarantines and military health. The Enlightenment brought about a greatly expanded government role in public improvements, including public health, during the 17th and 18th centuries. Those traditions were brought to the American Colonies; indeed, persons drafted for their medical skills were among the earliest settlers in Virginia and in New England. By the 19th century, and particularly after the Civil War, public health (including, individual care for the ill and the indigent) was generally recognized as a concern and a responsibility of the States.

In Virginia, the first mental hospital was built in Williamsburg in 1773 at the urging of Governor Fauquier, and Western State opened in Staunton in 1825. Jefferson’s Anatomical Hall, completed in 1826, was an early building for medical instruction at the University of Virginia. The Hampden-Sydney “Richmond Department of Medicine” opened in 1834, becoming the Medical College of Virginia in 1854. After the Civil War health activity in Virginia exploded due to the legacy of military health care and new learning about the importance of cleanliness, the source of infections and epidemics, and use of anesthesia.

Virginia’s State Board of Health came in 1872. Virginia mandated vaccinations and sanitary sewers and quarantine regulations in its port cities. In 1889, a young doctor recently trained in Vienna, Austria, in the latest medical and public health practices, was hired as Professor of Medicine at the University of Virginia. He quickly convinced Charlottesville and university authorities that to maintain the good health of university students and faculty it was necessary to address the health of the whole community they lived in. Eventually he persuaded the General Assembly to support this approach also. Teaching students through the practice of public health was the hospital’s mission. Teaching better health practices to the community and abating communicable disease at the source was its outreach.

Health care for the community means everyone in the community. Disease afflicts rich and poor and all races and occupations alike; every occupation has its hazards. The University hospital which Professor Barringer, my grandfather, founded and promoted so tirelessly was from its inception open to the Charlottesville community without regard for university affiliation, status, gender, race, or ability to pay. Many medical professionals and hospital administrators in Virginia still provide medical care on those principles, although they try to obtain payment when they can. And health remains an object of State concern and appropriations. For example, just a few months ago, Governor Terry McAuliffe announced State measures to make counteragents available at little or no charge aimed at combating the growth of opioid addiction, which he described as “a public health emergency” in Virginia.

The involvement of our state and federal governments in providing health care is so pervasive that we cannot pretend this is, “by default,” a private responsibility. The details of how the government goes about providing “affordable, quality health coverage for all Americans” are not as important as the affordability, the quality, the coverage offered. And this is a Virginia issue, not just a federal one.

Medicaid has a state budget impact, and there is talk of turning the entire health entitlement spectrum into federal block grants to the States. When McAuliffe tried to expand Medicaid under the ACA (essentially “free” to Virginians for a time, at the expense of the federal government), the General Assembly turned him down. That seemed to many observers (including me) to be more a partisan rejection of Obamacare than a vote against the public health and economic welfare of Virginians — but it certainly had the latter effect. And according to the Congressional Budget Office, the ACHA as proposed would substantially aggravate that effect.

Government support for health care has two rationales. One is economic. A healthy community is more productive, with less missed work, less down-time, less family distraction and dysfunction, and less threat of a catastrophic epidemic. Even if it isn’t you who is ill, you have an economic stake in the health of those around you, and you receive a direct benefit from the investment of your tax dollars in health care for others, not to mention the indirect benefit of a higher quality of community life. There is no distinction between individual health and public health in this regard.

The other rationale, of course, is compassion. Compassion is a moral imperative, and while I hear very little about compassion from Republicans these days it’s high time they re-discover it. The parable of the Good Samaritan is in the Bible, not a book of etiquette. Working in health care is an intensely rewarding endeavor, which attracts churches, charities, and all those many individual volunteers who devote their time to helping others. Not incidentally, compassionate policies also appeal to voters. Continue reading

Tech, Carilion Launch VTC Innovation Fund

The VTC Innovation Fund will build the innovation ecosystem centered on the Jefferson College of Health Science.

The VTC Innovation Fund will build the innovation ecosystem centered on the Jefferson College of Health Science.

Virginia Tech and Carilion Clinic have teamed up to form a $15 million venture capital fund in the hope of accelerating the growth of biotech companies taking root around Blacksburg and Roanoke, reports the Roanoke Times.

The VTC Innovation Fund aims to close seven to 10 deals over the next 10 years. By leveraging its money from other financial sources, managers hope the average startup will be able to raise between $2 million and $10 million. About 60% of the deals will be in life sciences. Although the main focus will be the Roanoke-Blacksburg area, the fund will consider investments elsewhere in Virginia or enterprises with strong ties to Tech or Carilion.

“When we looked at our grand vision going forward, we see that the innovation ecosystem has a few holes in it,” Virginia Tech President Timothy Sands said. “One is in the venture capital area. It’s not the only one, but it’s one we identified that we could do something about.”

Virginia Tech and Carilion are partnering to build a medical school and research institute in Roanoke, the Jefferson College of Medical Sciences, which stands at the center of what they hope will evolve into a biomedical industry cluster. Tech also is building a cutting-edge interdisciplinary program in neuroscience.

The Tech/Carilion duo is following a parallel path to Inova Health System in Northern Virginia, which is collaborating with George Mason University and the University of Virginia to build an biomedical cluster at the Center for Personalized Medicine. Inova has pledged to put $100 million in to venture capital in support of the innovation ecosystem there.

A third partner in the VTC Innovation Fund is Middleland Capital, a Washington, D.C.-based investment firm, which will manage the Roanoke fund and invest $500,000 to $1.5 million of its own capital, reports the Washington Business Journal. Connections with experienced Washington-area venture investors likely will provide a depth of expertise and access to outside capital that entrepreneurs in the Roanoke-Blacksburg area previously lacked.

“We want to focus on the absolute best and the absolute brightest and the shining stars of the region,” said Scott Horner, managing director of Middleland. “We want groups from outside the region to be able to look here and say, ‘Yes there is good stuff in the region.’”