Category Archives: Health Care

Map of the Day: Changes in Probability of Death

Map source: Wall Street Journal

It’s not new news anymore that gains in life expectancy have leveled off in the United States, driven by startling and unexpected declines among young and middle-aged whites. The so-called “deaths of despair,” including drug overdoses, are on the rise. So are liver disease (associated with alcoholism) and suicides. Chronic diseases associated with obesity such as diabetes, heart disease, and stroke are up, too.

The map above shows changes in the probability of death among 20- to 50-year-olds in the 50 states between 1990 and 2016. There is a remarkable divergence — health for this age group has improved significantly for some states, including Virginia, and gotten worse for others.

A breakdown by county in Virginia would be revealing. I hypothesize that western Virginia, especially the far Southwest, would show patterns similar to neighboring West Virginia and Kentucky. Although a more granular look at the data might reveal a different pattern, it appears that Central Appalachia is ground zero for deaths of despair.

Does Anybody Notice the $300 Million Tax Increase Baked into Medicaid Expansion?

Governor Ralph Northam (left), Richmond School Superintendent Jason Kamras, and Senator Mark Warner met yesterday to discuss Medicaid expansion and school funding. Photo credit: Richmond Times-Dispatch

Governor Raph Northam and U.S. Senator Mark Warner hit the road yesterday with the media in tow, making the case that Medicaid expansion will free up $421 million over two years for other priorities such as K-12 schools.

“When we talk about education, we have to talk about health care,” Warner said during a roundtable discussion at Albert H. Hill Middle School in Richmond, as reported by the Richmond Times-Dispatch. “We’ve got to do this.”

Meanwhile Secretary of Finance Aubrey Layne is making the case that enacting Medicaid expansion is necessary to preserve Virginia’s coveted AAA bond rating, which is teetering on the edge of a downgrade.

That’s quite the rhetorical jiu jitsu move. For years, Republicans have opposed expanding Medicaid under the provisions of the Affordable Care Act on the grounds that it would be fiscally irresponsible, running up state Medicaid expenditures even after accounting for a 90% federal contribution, and competing with other priorities such as K-12 schools, higher education, and pay raises for state employees.

How is it possible for the Commonwealth to simultaneously expand Medicaid at an estimated cost of $300 million over the next two years and free up $421 million for other programs, as the Washington Post quotes Northam as saying? Two things. First the state cost of Medicaid expansion would be offset by means of an “assessment” — in other words, a tax — on the net patient revenue of Virginia’s acute care hospitals. Surprised to hear about that? Yeah, so am I.

Second, Medicaid expansion will allow the state to reduce spending by $380 million on indigent care funding, state spending on mental health, prison inmates and various programs for the poor, according to the House version of the budget. (I can’t figure out where Northam gets his $421 million estimate.)

Voila! That’s $380 million (or $421 million if you use Northam’s figure) that can be spent on other things, such as directing money into the state’s cash reserves and/or K-12 schools. Regarding those reserves, the state has only $281 million set aside in the event of a several revenue downturn, with $154 million scheduled to be injected this year. The budget submitted by former Governor Terry McAuliffe would have added $281 million, but the proposed budget adopted by the House would add only $91 million over the next two-year budget, and the proposed budget adopted by the Senate would add only $180 million.

Bacon’s bottom line: Does the public realize that there is a $300 million tax increase embedded in this plan? I did not understand that to be the case until I read the news accounts with a fine-tooth comb. The Times-Dispatch and Washington Post coverage mentioned the tax only in passing deep in their stories. Of course it’s in the interest of Democrats to downplay the tax increase, but, remarkably, I’ve seen nothing to suggest that Senate Republicans, who oppose expansion, have made an issue of it.

Let’s imagine an alternate universe in which Virginians said, (a) we want Medicaid expansion, and (b) we want to fund it without a tax increase on hospital revenues, which likely would be passed on to patients in the form of higher hospital charges. If the state is generating savings in the realm of $400 million a year from Medicaid expansion, why not just apply those savings to the 10% state share of the program? Why the necessity of adding a roughly $300 million “assessment?”

According to the numbers we’ve been given, paying for Medicaid expansion with savings to state programs would leave about $100 million left over to plunk into the state’s cash reserve. Of course, that approach wouldn’t allow Northam and Warner to tell people that “Medicaid expansion” will help Virginia schools, and it wouldn’t put as much money into the state’s cash reserves as Layne would like.

I find it astonishing that the hospital assessment has not become a hot-button issue. Health care costs are out of control as it is, and a $300 million tax on patient revenues can only make the problem worse (unless you believe that hospitals will settle for lower profits, in which case I’ve got some great swamp land in Florida I’d like to sell you.)

You’ve got to give Northam political credit. He and House Republicans are very close to pulling off the trick of expanding Medicaid and “freeing up” hundreds of millions of dollars for new spending without Virginians even noticing that they’d be indirectly paying for a $300 million tax increase on hospitals. This guy is good.

How to Control Health Care Costs: Prune Useless Tests, Speed Recovery from Surgery

Daniel Carey. Photo credit: The News and Advance.

It comes as no surprise that Virginia’s new Secretary of Health and Human Resources, Dr. Daniel Carey, supports Governor Ralph Northam’s push to expand the Medicaid entitlement. But he’s also got some ideas on how to squeeze costs out of Medicaid — and Virginia’s health care system generally.

One strategy is to decrease the use of procedures and tests that provide little value. Writes Amy Trent with the News and Advance:

He points to routine echocardiogram and routine stress testing before noncardiac surgeries as well as routine vitamin D testing, all of which can offer little value, he said. It’s more cost effective to treat most people with a vitamin D supplement rather than routinely testing vitamin D levels except in very specific circumstances, according to Carey. Physicians need to stop giving tests that are unlikely to change the care patients receive, he said.

“We need to eliminate that because it’s not cost-effective care,” Carey said.

Carey advocates implementation of the Choosing Wisely principles, launched by the American Board of Internal Medicine, which consults 100 medical specialty groups to maintain a library of overused tests and treatments.

While the state cannot mandate these measures, Carey said in a statement, “What we can do is work with the state plans, [The Department of Medical Assistance Services], and the Virginia Center for Health Innovation to not cover low-value care.”

Meanwhile, Carey wants to expand a Virginia Commonwealth University initiative that speeds recovery from surgery.

In the online publication OncLive, Dr. Traci Hedrick, co-director of the Enhanced Recovery Program at the University of Virginia Health System, writes that since her system’s implementation of enhanced recovery protocols in patients undergoing major colorectal surgery in 2013, the hospital has seen an average reduction of two days for hospital stays, an 80 percent decrease in opioid use and a 50 percent reduction in complications. In addition, “there was a $6,567 per patient reduction in total hospital costs,” Hedrick wrote.

Enhanced recovery after surgery makes sure patients are as healthy as possible prior to surgery, thereby reducing the effects of surgery on the body.

Both initiatives sound promising. The trick is implementing them in an industry notoriously resistant to change. It’s one thing to identify ways to spend health care dollars more efficiently, and it’s quite another to persuade hospitals and physicians to adopt measures which, if successful, will cut into revenues and profits.

One thing we know: Hospitals and doctors won’t implement the changes out of competitive pressure. There is no competitive pressure. Virginia health care is increasingly dominated by a handful of monopolistic health systems and giant physician practices. Moreover, there is no price transparency, so it’s not as if a hospital could gain market share by touting its lower-cost services. Virginia does have some control over the way it designs its Medicaid programs, so perhaps there is some hope in that sub-market. Otherwise, Carey will have to rely mainly on moral suasion. However, I can’t remember the last time moral suasion ever convinced anyone to act against their self interest.

Why Are Asians and Hispanics So Healthy?

City/county ranking of Virginia health outcomes based on potential years of life lost before age 75. Source: Robert Wood Johnson Foundation

The Robert Wood Johnson Foundation has issued its annual Healthy Community report for the United States. As usual, the information is packaged in such a way as to highlight the health disparities between racial/ethnic groups. But the findings for Virginia, which the state-level report largely overlooks, do not fit the dominant institutional-racism narrative. It turns out that Asians are the healthiest racial/ethnic group by far. It also turns out that, despite lower incomes and education levels, Hispanics are healthier than whites. The only finding that conforms to the narrative is the blacks are the least healthy of any group.

The info-graphic to the right shows differences in health outcomes (potential years of life lost before age 75) by place and by race/ethnicity. The “place” metric compares the differences in health outcomes by city or county. There is a wide disparity (as also seen in the map above) between localities with high incomes and high levels of education and localities with low incomes and education. The worst pockets of unhealth are in far Southwest Virginia, Southside, the Eastern Shore, and older cities. No surprises there.

Far more interesting is the disparity between racial/ethnic groups, which many researchers and commentators persist in defining as a gap between whites on the one hand and blacks and Hispanics on the other — a gap matching the socio-economic divide and consistent with the paradigm of America as a nation afflicted with institutional racism and discrimination.

Yet of all major racial/ethnic groups, Asians are the healthiest. By far. Here in Virginia, according to the study, Asians experienced the lowest level of “premature deaths,” measured by years lost per 100,000 — only 2,600. Hispanics fared next best, with 3,100 years lost, whites with 6,200, and blacks with 8,700.

Another remarkable finding: Whites reported the highest incidence of poor mental health days: 1.6 for Asians, 2.7 for Hispanics, 3.5 for blacks, and 3.8 for whites.

Results conformed to stereotype for poor or fair health, while self-reported “poor health days” showed almost no difference between whites, blacks, and Hispanics. Asians reported the fewest poor health days.

The comparative good health of Hispanics in Virginia is all the more remarkable given that, as the report documents but takes little note of, Hispanics have lower high school graduation rates, have less health insurance, and have a higher rate of teen births than any other group.

Asians and Hispanics do not fit the dominant narrative of the relationship between race and health in the United States. It strikes me that these anomalies are worth exploring. Persuading public health researchers to dig deeper may be a hard thing to do, however. The received wisdom, once established, is a hard thing to dislodge.

Update: And then there’s this headline from the Roanoke Times: “Report finds death rates rise for white, middle-class Virginians.”

The Virtues of an Ancestral Diet

Elicer Tribz explains how to make cinnamon spice from the bark of the cinnamon tree.

On the hillside above the Blancaneaux Lodge in Belize, six gardeners tend to a three-and-a-half-acre organic garden that supplies the hotel’s three restaurants with delectable vegetables, fruits, beans, and herbs.

As a prelude to a communal dinner at the hotel’s Garden restaurant, Elicer Tribz takes lodge guests on a tour of the garden. He proudly describes how he and his fellow gardeners nurture the soil and tend to the lettuces (10 varieties), the cherry and Roma tomatoes, the squash, zucchini, carrots and celery, and innumerable herb bushes and fruit trees. He explains how the gardeners create a natural fungicide using microorganisms found in the rain forest, and how they man the garden literally around the clock when fending off attacks of woolly caterpillars.

Throughout the tour, Tribz pinches off leaves for the guests to smell and taste. The vegetables are not only free of pesticides and herbicides, thus safe to eat off the vine without washing, they are very flavorful. The fresh food at Blancaneaux puts to shame the grocery store vegetables that I normally eat, genetically engineered as they are to survive lengthy spells as agricultural inventory. At Blancaneaux guests enter a world of more intense taste.

I can also vouch that after three days of hiking like a mountain goat and eating healthy meals, I felt great. This was life in the blue zone — the recipe for living a longer, healthier life.

Eating organic food was not an experience my wife and I had been looking for when planning our vacation. It was an unexpected bonus. As total coincidence would have it, on the airline flight to Belize I plowed through “The Dental Diet,” which touted the virtues of organic and free-range foods. Combining the theory from that book with the experience of eating organic food at Blancaneaux set into motion a train of thought about the relationship between health, the “ancestral diet” (as author Steven Lin calls it), economic disruption, food deserts, and economic inequality.

Let me advance three nested propositions. First, many of the chronic diseases in 21st century society — not just the biggies like heart disease, obesity and diabetes but a host of auto-immune diseases — originate from our modern diet. To prevent those diseases rather than merely treat them, North Americans, Europeans, and anyone else embracing a conventional “western” diet” must radically change their eating patterns — most notably by consuming fewer processed sugars and carbohydrates, more grass-fed cattle and poultry, and more fresh fruits, beans and vegetables. Second, a dietary revolution by necessity will require a wrenching agricultural and food-processing revolution. And third, the transition from industrial agriculture to free range/organics will accentuate the divide between those who can afford good food and the health benefits that accrue from it and those who can’t.

Lin looks at health and diet issues through the prism of his discipline: dentistry and oral health. Our mouths host an extensive biome that interacts with our bloodstream (especially if we have gum disease) and our gut biome (every time we swallow saliva). Lin’s exploration of this interaction, which medical science is only beginning to understand, led him to several intriguing perspectives and insights.

Lin argues that dental disease was almost non-existent among early homo sapiens. Likewise, crooked teeth, which we moderns think of as the unlucky outcome of the genetic lottery, were equally rare. The absence of dental maladies among pre-agricultural humans is all the more remarkable when one considers that they did not avail themselves of tooth brushes, tooth paste, dental picks, braces, and orthodontics! How could that be possible? Lin’s answer: The ancestral diet of meat, grains, fruit, and, later, dairy — not processed carbohydrates — allowed the mouth biome to remain in balance, reducing acidity, and for the upper and lower jaws to grow larger and stronger with room to accommodate more teeth. With plenty of space in the jaw, teeth in early homo sapiens, like those of pre-agricultural societies documented within living memory, grew in straight and even.

Cavities, bleeding gums and crooked teeth are only the most visible of the health disorders set into motion by the agricultural revolution, with its widespread adoption of carbohydrate-laden wheat, rice, and maize, and then the industrial revolution, with its widespread adoption of processed sugars. The positive accomplishment of the agricultural and industrial revolutions is that they fed billions of people. The downside is that industrially produced food afflicts mankind with a host of chronic diseases.

Animal products, says Lin, should be sourced from pasture-raised and free-range livestock, not from grain-fed livestock pumped up with antibiotics. Likewise, seafood should be caught from natural waters, not farmed. Fruits and vegetables should not be sprayed with pesticides and antibiotics, which alter the microbiome of the soil as well as that of their own genes. We should purge sugar, white flour, vegetable oils from our diets. In their place we should consume more fiber, probiotics and prebiotics. Throw your Captain Crunch into the trashcan, and eat your Brussel sprouts.

To my mind, the virtue of Lin’s book is not the nutritional guidelines — they will be familiar to many readers following other dietary regimens — as much as the persuasive, science-based justification he offers for them. For purposes of argument, let us accept that widespread adoption of a organic/free-range diet is necessary to restore the health of America’s population with its many chronic medical conditions. Now let us confront the implications of adopting those guidelines on a massive scale.

We know that vegetables, beans and fruits can be raised free of herbicides, pesticides and antiobiotics on a fairly large scale. Blancaneaux shows how it can be done, as do innumerable other organic farms such as Polyface Farm in Virginia’s Shenandoah Valley. The question is at what cost. Organic produce is more expensive, mainly because the gardening is more labor intensive. Grass-fed beef and free-range chicken also are more expensive, mainly because they require more land.

Organic and free-range foods are niche products, accounting for 4% of total U.S. food sales, and they have little impact on agricultural land and labor markets. But increase organics’ market share to 50% — never mind 100% — and farms will experience massive labor shortages and land scarcity. As these key inputs of organic food increase in cost, the price of organic food will rise as well. While organic and free-range food command, say, a 30% price premium in grocery stores today — I base that guesstimate on the price differential I see at Kroger — I conjecture that the premium could well triple or quadruple.

America’s educational divide will accentuate the differential impact on different segments of the population. Those most motivated to alter their diets — not any easy task — are those with the education, income and inclination to read books like “The Dental Diet” and the agency to believe that they have the power to change their lives for the better. Lower-income Americans, who tend to be more fatalistic about their lot in life, will be less likely to change.

If America has a problem now with food deserts — unequal access to healthy food — the disparity will increase dramatically if the price of organic/free-range food doubles. The nutritional divide will become more marked, and so will the ensuing health divide.

How do we offset such a pessimistic outcome? The default response would be to give poor people more fresh food. But giving them healthier food provides no guarantee that they will eat it. Far better would it be to involve the poor in raising their own food, whether cooperatively in communal urban farms, individually in back-yard gardens, or perhaps as employees in multi-storied urban greenhouses. People place far greater value in a thing that they earn through their own sweat and toil.

Whatever the long-term solution to the problem of food inequality, the scientific case is growing for the argument that we are what we eat. I’m ready to do what it takes to stay healthy and active, even if it means eating more cauliflower and fewer french fries. Hopefully, other Americans will find a way to do so, too.

The Future of Health Care Delivery: Homes not Hospitals

VCU hospital. The future of health care delivery… or the past?

“The days of the hospital, as we know it,” may be numbered,” declares Laura Landro in a Wall Street Journal article today.

In a shift away from their traditional inpatient facilities, health-care providers are investing in outpatient clinics, same-day surgery centers, free-standing emergency rooms and microhospitals, which offer as few as eight beds for overnight stays. They are setting up programs that monitor people 24/7 in their own homes. And they are turning to digital technology to treat and keep tabs on patients remotely from a high-tech hub.

For the most part, the investments in outside treatment are driven by simple economics: Traditional hospital care is too costly and inefficient for many medical issues. Inpatient pneumonia treatment, for example, can cost 15 to 25 times more, yet many low-risk patients who could be safely treated as outpatients are hospitalized, studies have shown.

That’s what’s happening nationally. But I don’t see many signs of it happening here in Virginia. Indeed, when a rural hospital in Patrick County goes out of business, everyone’s instinct is to think about how to revive it so someone else can take it over rather than rethink how health care in a rural county might delivered more effectively and efficiently.

I’m old enough to remember when the Virginia legislature back in the 1980s moved too slowly to deregulate the banking industry. North Carolina got the jump on us, allowing its banks to merge with one another and then acquire out-of-state banks before our banks had a chance to merge, grow and acquire. The Carolina banks ate up the Virginia banks, and the top banking jobs and financial clout shifted from Richmond and Norfolk to Charlotte and Atlanta.

I’m worried that something similar is happening today with the health care sector. The problem is not that Virginia hospitals haven’t merged — to the contrary, huge health care systems have swallowed up competitors in every metropolitan area in the state. The problem is that the General Assembly hews to an outmoded model of the health care industry. By clinging to that model, more appropriate to the 1960s than the 2010s, we run the risk that Virginia healthcare providers will stifle innovation, thwart productivity, and burden the population with an obsolete health care system.

The underlying assumption is that health care should be organized around something called “hospitals,” which are medical complexes in which scores, even hundreds, of medical services are bundled under one roof under common ownership. State policy buttresses this arrangement by requiring providers to obtain a Certificate of Public Necessity (COPN) in order to build a new facility, thus protecting hospitals from competition by free-standing entities. State policy also perpetuates the status quo by allowing nonprofit hospitals to go untaxed, giving them a huge competitive advantage over for-profit competitors organized by physicians or entrepreneurs.

I have long railed against this arrangement without benefit of knowledge of what’s happening in other states. The Wall Street Journal, however, makes it vividly clear how healthcare enterprises in other states are innovating.

Perhaps the biggest drawback to hospitals is that they are germ factories. With the rise in antibiotic-resistant bacteria, any patient entering a hospital runs the risk of infection. Indeed, at any time, reports the WSJ, one in 25 patients in the U.S. is battling a hospital-acquired infection.

It’s also becoming apparent that health care providers often can deliver care at lower cost and better outcomes in independent facilities or at home. Studies, says the WSJ, show that “hospital-level care at home for certain conditions can be provided for 30% to 50% less than inpatient care with fewer complications, lower mortality rates, and higher patient satisfaction.”

Acute care hospitals will always be necessary to deal with medical conditions requiring highly specialized, highly technical, or highly intensive care. But hospitals are clearly not the best setting for chronic or non-intensive conditions.

New York’s Mount Sinai Hospital has developed a hospital-at-home program, HaH-plus, for patents who show up at the emergency room or are referred by primary care physicians. A mobile acute-care team provides staffing, medical equipment, medications and lab tests at home, and is on call around the clock if a condition worsens, says the WSJ. Mount Sinai estimates that nationally, 575,000 cases yearly could qualify for the program. Treating just 20% of them could save Medicare $45 million annually.

Another new concept — potentially well adapted to rural counties — is the microhospital, sometimes referred to as the neighborhood hospital. Typically, says the Journal, 92% of microhospital patients are treated and sent home in an average of 90 minutes, and 8% are admitted overnight for care such as intravenous-medication administration. Says the CEO of Lousiana-based Ochsner Health Systems, 80% of its capital expenditures are going to outpatient clinics. “I don’t see us building new hospitals.”

The primary justification for maintaining COPN in Virginia is that preserving hospitals’ monopoly status enabled them to generate the profits they need to cover charity care, bad debts and money-losing Medicaid. If the General Assembly enacts Medicaid expansion, thus relieving hospitals of a significant charity care/bad debt burden, it will kick the props from under COPN.

I would argue that eliminating COPN would be worth the price of expanding the entitlement state. Competition in Virginia would lead to more innovative healthcare delivery systems. If the health care systems didn’t introduce the innovations, local physicians or out-of-state enterprises would. Potential savings for Virginia patients would run into the billions of dollars.

It’s time for an innovation-driven healthcare system. Let’s do it.

Conservatives Win Big with House Healthcare Plan

by John Fredericks

Virginia conservatives – and the Trump Administration – should embrace the health care plan rolled out this week by House of Delegates Speaker Kirk Cox, R-Colonial Heights. The House budget includes a plan to bring billions in taxpayer dollars back to Virginia to help uninsured Virginians get health care coverage through Medicaid Expansion.

For four years, I sang a different tune. I stood shoulder-to-shoulder with my fellow conservatives at Americans for Prosperity, former Speaker Bill Howell, and other Republicans to fight Medicaid Expansion.

At the time, the future of the Affordable Care Act seemed uncertain, and banking on its promises appeared financially risky. There were fears it would collapse, or be repealed, leaving states to pay for a huge new entitlement we couldn’t afford. That seemed like an unsafe bet for Virginia.

That all changed in 2017.

Today, I unequivocally support the House plan to expand Medicaid to hardworking families in Virginia. Here’s why:

Obamacare isn’t going anywhere anytime soon. After years of trying, Congressional Republicans showed us in 2017 they couldn’t repeal the law. And even if they try again, which seems unlikely, it’s doubtful they will be successful this year or beyond.

In addition to lacking votes, federal Republicans last year showed us they’ve never had anything approximating a viable replacement plan after years of making empty promises to constituents in fund-raising letters. In other words, they misled us.

The most shocking realization came last spring at a White House briefing on the Republican plan to repeal and replace Obamacare. I sat the in briefing room aghast at what I heard – the GOP plan rewarded GOP states that expanded Medicaid (like Indiana, Ohio, and Arkansas) with continued funding, and penalized states that resisted expansion by cutting their funding through reduced block grants.

Instead of benefiting from being a prudent holdout, Virginia would have received less Medicaid funding from Washington! Thanks for nothing.

While it’s easy enough to retreat into orthodox ideology in the face of complex policy decisions that don’t fit into neat partisan boxes, I prefer to deal in reality rather than bury my head in the sand.

The House of Delegates budget plan takes the same clear-eyed, reality-based approach by opting to work with President Trump to secure key conservative reforms such as work rules and personal responsibility standards.

Let’s be honest, this is a plan many Democrats won’t like. If you’re a Republican, that means you’re doing something right. You’re reforming a program rather than just providing a handout.

Speaker Cox is developing a plan incorporating conservative ideals like those Vice President Mike Pence championed when he was Governor of Indiana.

In my mind, if it’s good enough for a conservative like Mike Pence and Indiana, then it’s good enough for Virginia.

Speaker Cox undoubtedly will face misguided criticism from those who can’t see past the politics of the moment. It’s better to have Speaker Cox negotiating the details with Democratic Governor Ralph Northam now than waiting too long and ending up with Del. David Toscano, D-Charlottesville, driving the talks.

Because make no mistake: Many Democrats want straightforward Medicaid expansion, or worse – Bernie Sanders-style socialized healthcare.

The GOP-controlled House is taking the conservative approach to health-care reform and will work with the Trump administration to achieve that goal.

The House plan aims to put low-income Virginians in private insurance plans with premiums and co-pays, giving them skin in the game. The plan sets up health savings accounts so people are incentivized to make their own health-care decisions. And, most importantly, they’ve created a “Training, Education, and Employment Opportunity” program to put people on a path to self-sufficiency. Continue reading

One Man’s Descent into Healthcare Price Opacity

In theory, Americans could control runaway healthcare costs if they shopped around for the best deal on big-ticket medical procedures. But in practice, there are limits to a patient’s willingness to compare doctors and hospitals when he’s clutching his chest while medical technicians slap an oxygen mask to his face and trundle him into an ambulance. Likewise, there may be limits if the treatment options are so complex and require such specialized knowledge that a layman cannot make an informed judgment.

Still, some procedures should lend themselves to comparison shopping. Take hip transplants, for instance. The procedure is easily explained by doctors, and the risks are readily grasped by patients. Rarely do patients require emergency surgery. They have ample time to check around to find the optimal balance of price and quality. 

In 2010, according to the Centers for Disease Control, surgeons performed more than 310,000 hip transplants. At an average cost of $40,000 per procedure, hip surgeries account for more than $12 billion a year in health care expenditures. Americans could literally save billions of dollars if they were empowered to spend as much time looking for the best deal on hip surgeries as they do, say, buying a car.

I had the opportunity last year to put that theory to the test. I had been suffering from an arthritic right hip for several years. While the discomfort usually was tolerable, the infirmity was limiting my mobility. I had trouble getting in and out of the car. I found it difficult to straighten my body when I stood up from a chair. I couldn’t walk more than a mile or so without my hip giving out. If I wanted to live an active life as I approached retirement age, I knew I had to do something.

My primary care physician referred me to an orthopedic surgeon in the Richmond area, Dr. Jason Hull. He took an x-ray of my hip and found that most of the cartilage had worn away — the hip and socket were scraping bone on bone. I was an obvious candidate for surgery.

Although he performed 450 to 500 hip and knee replacements a year, Hull confessed that he couldn’t tell me how much the procedure would cost — or even what he would charge. I’d have to ask the business office of his practice, Tuckahoe Orthopedics. As for what Bon Secours St. Mary’s Hospital would charge, I’d have to ask them.

While I liked Hull’s forthright demeanor and had full faith in his competence, I also felt a responsibility as a health care consumer to check out my options. Over and above what the surgery would cost me personally, I felt a moral obligation to see if I could save “society” some money. As it turned out, being a good health care consumer was all but impossible.

One idea particularly appealed to me. My friend Bill Moscowitz, a Virginia Commonwealth University pediatric surgeon, highly recommended Health City, a state-of-the-art hospital on Grand Cayman founded by renowned Indian heart surgeon Dr. Devi Prasad Shetty. Its value proposition: By focusing on a narrow range of high-volume procedures, it could provide treatment at comparable outcomes to the best U.S. hospitals but at much lower cost. Indeed, the hospital was known to put up the patient and a family member in a resort hotel on Grand Cayman’s famed Seven Mile Beach for post-operative recuperation. That sounded like a great way to recover from surgery! When the website confirmed that the hospital performed hip replacements, I had fantasies of my wife and me sipping margaritas and lounging under umbrellas on soft sandy beaches.

Seven Mile Beach — my kind of rest & rehabilitation.

I submitted an email inquiry to Health City but, alas, the hospital never responded. Then I thought to inquire if my health insurance company, UnitedHealthcare, even covered procedures conducted at Health City. When I checked, the answer was no. That was a deal killer. It didn’t matter if Health City could under-price an American hospital by 50%, without insurance, I’d personally pay more. So, I restricted my search to hospitals in the Richmond area.

The Virginia Health Information website provides average cost data for various high-volume procedures performed in Virginia hospitals. Based on 2015 data, the website reveals that the average price of a hip replacement in Central Virginia — $18,810 — was lower than in any other region of the state. (The statewide average was $20,697.) As I recall, when I searched the website last year, it provided average cost figures for individual institutions. I can’t find that data any longer. Here’s all the database offers now:

Given the fact that a dozen Central Virginia hospitals conduct orthopedic surgeries, this table isn’t remotely helpful. As I recall, VFI data indicated last year that Bon Secours St. Mary’s Hospital had the lowest, or almost the lowest, charges among the high-volume hospitals in the region. The hospital performs more than 2,000 procedures a year, and 10% of its total business consisted of orthopedic surgeries. Dr. Hull also conducted his surgeries there, so I felt certain that, whatever the price, at least I was assured of a positive outcome.

From a medical point of view, sticking with Hull and St. Mary’s turned out to be a good decision. Continue reading

What’s This? Medicaid Expansion Pays for Itself?

Reversing its long-standing opposition to Medicaid expansion, the House Appropriations Committee yesterday adopted a budget proposal that would accept more than $3 billion in federal funds to provide Medicaid coverage for more than 300,000 uninsured Virginians.

Here’s the remarkable thing: You can read the news accounts of the Richmond Times-Dispatch, Washington Post, and Daily Press and never discover that the state of Virginia will save more money from “Medicaid Transformation” than the state share of supporting the state-federal program will cost.

I started out this blog post trashing House Appropriations for capitulating on Medicaid expansion. But after absorbing this report of the Health and Human Resources Subcommittee, I had to delete everything I wrote and start all over. It appears that House Appropriations has figured out how to eliminate the biggest objection to the program’s expansion, namely that it would constitute a big, ongoing drain on the General Fund. This turn-about is so extraordinary that I have to say that I, a long-time foe of Medicaid expansion on fiscal grounds, feel compelled to support it now.

Medicaid Transformation would provide coverage to adult Virginians up to 38% above the federal poverty line, injecting billions of federal dollars into Virginia’s health care system. The federal government will provide a 94% match in 2018, 93% in 2019, and 90% in 2020. The state share will level out at 10%.

The estimated cost of the program to Virginia will be $80.8 million in FY 2019 and $226.1 million in FY 2020. But  the state expects to save $101.3 million and $269.7 million respectively from programmatic cost reductions.

Where do the savings come from? Primarily from cutting indigent care funding to hospitals, and from reducing expenditures on state-funded community behavioral health, prison inmates, the FAMIS program for pregnant women, and the GAP program for the seriously mentally ill.

The proposed legislation also includes a 0.5% assessment on hospitals’ net patient revenue in FY 2019 and 1.4% assessment in FY 2020 on the grounds that Medicaid expansion will reduce indigent care costs (charity care and bad debts), resulting in significant improvements to hospital bottom lines. I’m not sure why this tax is necessary if the Medicaid Transformation results in a net savings to the General Fund without it. The hospital lobby opposes it, and for once I can sympathize.

I still have long-term concerns. The United States entitlement state is unsustainable, and the recent round of federal tax cuts and spending hikes has done nothing to change my opinion. At some point, the federal government will experience a fiscal crisis that will force it to shift the cost burden of Medicaid to the states, in which case Virginia will have to shoulder a much bigger share of the cost at hideous expense or dump hundreds of thousands of Virginians from the Medicaid rolls. But that’s 15, 20, or 25 years from now. And participating in the program will inject billions of dollars in federal funds into the Virginia health care system and economy right now.

I also question how much Medicaid expansion will actually improve medical outcomes. There’s still a physician shortage, many physicians refuse to take on Medicaid patients, and most add-on patients likely will continue seeking treatment in emergency rooms. But any improvement to the public health, even if marginal, is better than nothing. And it seems foolhardy to reject billions of federal dollars that cost the state nothing.

House budget writers are at loggerheads with their counterparts in the Senate Finance Committee, who propose a budget without Medicaid expansion. But if the House numbers stand up to scrutiny and Virginia can actually save money from the expansion, I don’t know how the Senate can resist. Medicaid expansion looks like a done deal.

Republicans Cave on Medicaid Expansion

General Assembly Republicans have capitulated on the issue of Medicaid expansion. All that remains to be decided is the terms of their surrender.

Speaker of the House M. Kirkland Cox, R-Colonial Heights, has signaled his willingness to “dialogue” with Governor Ralph Northam about Medicaid expansion if the Governor is willing to accept the condition that would require able-bodied recipients to work or be actively seeking employment.

Wrote Cox to the Governor in a letter that House leadership distributed publicly:

The House is willing to begin a dialogue on health care that includes significant reforms and strong taxpayer safeguards, but I want to be clear that the 51-member House Republican Caucus has taken a binding caucus position against ‘straightforward’ Medicaid expansion.

If your position is to pass straightforward Medicaid expansion without work requirements or other reforms, then you will be responsible for the failure to provide health care coverage to more Virginians.

Republican bills, reports the Richmond Times-Dispatch, also would require periodic checks of the recipients’ household income, and would include exemptions for adults attending college, acting as sole caregivers for children under six, receiving long-term disability benefits or otherwise proved to be “physically or mentally unable to work.”

A spokesman said Northam was “encouraged” that Republicans were willing to begin discussion about Medicaid expansion but not happy with Cox’s proposed restrictions.

Bacon’s bottom line: Republicans have held the line against Medicaid expansion on fiscal grounds for four years. It’s difficult to imagine any explanation for the about-face other than fear and trembling over the 2017 election results, which came within a frog’s eyelash of evicting the Republicans from control of the House of Delegates. Cox has caved on the expansion and now he’s bargaining over the fine print. It will be exceedingly difficult politically for him to backtrack.

But Medicaid expansion still will be bedeviled with the same problems that afflicted it when former Governor Terry McAuliffe was pushing for it.

Even with the federal government funding 90% of the budget for expansion, Medicaid expansion still will cost Virginia nearly $190 million a year more by 2022, according to the Heritage Foundation, putting the squeeze on other budget priorities. All for what? Yes, expansion will provide “insurance” to more poor and near-poor people. But what quality of coverage will they receive? Will Medicaid expansion help them find a doctor in a country plagued with primary care physician shortages, or will recipients continue to clog emergency rooms? And who benefits financially? The patients themselves — or the hospitals that will see a great reduction in the treatment costs they have to write off as charity or uncompensated care? Will legislation expanding Medicaid ask anything of the hospitals, many of which, like Scrooge McDuck, are rolling around in piles of money? Or will they just fatten their profit margins? Finally, is there any evidence that Medicaid recipients’ health will improve? Or will physicians dish out more painkiller prescriptions, as is said to be the case in other states, and risk aggravating the opioid epidemic?

If past is prelude, it really doesn’t matter if Medicaid expansion actually helps anyone. People are suffering, and people want to “do something” — regardless of what it costs or whether it works.