Peter Nelson
Peter Nelson is a Policy Fellow with Center of the American Experiment. As a Policy Fellow, he spends most of his time writing about issues related to health care policy, including Medicaid, long-term care, and insurance regulation. His articles have appeared in the Star Tribune and MetroDoctors, as well as local newspapers across Minnesota. He received a B.A. in economics from Wheaton College and a law degree from the University of Minnesota Law School where he was a member of the Minnesota Law Review.
Thursday, September 11, 2008Bush Administration Threatens to Cut Low-income Parents from SCHIP in MinnesotaBy Peter NelsonCategories: Minnesota, SCHIPMore news on the Bush administration’s efforts to crack down on SCHIP is coming out of Minnesota. John Graham of the Pacific Research Institute just explained how the administration appears to have backed down on enforcing its rule restricting SCHIP expansion in states that do not demonstrate that they’ve enrolled 95 percent of eligible children. Instead, the administration is flexing its muscle in Minnesota. Last month the Centers for Medicare and Medicaid Services (CMS) denied Minnesota’s application to extend its Medicaid waiver that allows Minnesota to use SCHIP funds for adults. Minnesota had a month to appeal the ruling and just yesterday received a two-week extension. Many people (especially readers of this blog) might be thinking it’s about time SCHIP stopped funding adults in Minnesota. After all, SCHIP was created to fund health benefits for children. Indeed, Minnesota has long been the whipping state on this issue because nearly all of its SCHIP funds go to adults. But not so fast. Minnesota only funds adults because it already funded children prior to SCHIP. Because SCHIP was intended to reduce the number of uninsured children, it specifically disallowed extra funding to state programs that already insured children. This SCHIP provision is called the maintenance-of-effort requirement. The idea was that extra federal funds should only go to uninsured kids and so states already putting forth an effort should be forced to maintain that effort as a prerequisite to receive funding for further expansion. The maintenance-of-effort requirement was patently unfair to taxpayers in Minnesota and those other states that already expanded health care programs for children. Minnesotans were already using their hard-earned tax dollars for their own program and then SCHIP came along and tried to dig more money out of our pockets to pay for children in other states. CMS gave Minnesota an appropriate level of flexibility to cure this inequity. Without that flexibility, Minnesota would be forced to spend SCHIP dollars on children in families with incomes above 275 percent of federal poverty guidelines as opposed to funding parents in families below 200 percent of FPG. Which families do you suppose need the funding more? Now CMS wants to take funding away from those parents. Well, Minnesotans can be forgiven for wanting to keep Minnesota dollars in Minnesota, which is why the entire Minnesota congressional delegation, including stalwart conservatives like Michele Bachman and John Kline have asked HHS Secretary Leavitt and CMS to reconsider pulling its funding for Minnesota's SCHIP program.
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Friday, September 5, 2008AARP Peddles Medical Bankruptcy Myth to New ExtremesBy Peter NelsonLast night, as I watched the Republican National Convention on MSNBC, I about fell out of my chair when I saw an ad by AARP that claimed that "1.85 million Americans go bankrupt due to medical bills in one year." The extreme exaggeration -- nothing even approaching 1.85 million Americans go bankrupt due to medical bills -- came as quite a shock. (Yes, I know, any AARP ad, no matter how exaggerated, really isn't "fall out of chair" material. Disturbing as it may be, that was in fact my reaction.) Of course, AARP intends to use their extreme exaggeration to stir up public sympathies to radically revamp a health care system that apparently plunges people into financial ruin. In the past year I’ve written a couple blog posts that discuss the flawed methodology behind studies and reports that seem to overestimate the number of medical bankruptcies and the number of "underinsured" Americans. Even compared to these studies, 1.85 million is a stratospherically high estimate. The study most often cited as proof of a widespread medical bankruptcy problem estimates that about half of the 1,452,030 bankruptcies filed in 2001 were caused by medical debt. For anyone needing help dividing by two, that’s 726,015 medical bankruptcies. According to the American Bankruptcy Institute, bankruptcies peaked at 2,039,214 in 2005. And so, if we buy into the half of all bankruptcies estimate, medical bankruptcies peaked at 1,019,607. That’s nothing close to 1.85 million. Now consider that bankruptcy reforms implemented in 2006 cut the number of bankruptcy filings by over half. Despite a jump in bankruptcy filings between 2006 and 2007, there were still only 822,590 filings in 2007. How on earth can there be over one million more medical bankruptcies than actual bankruptcies? There’s obviously something very wrong with AARP’s claims. How much does medical debt really impact bankruptcies? A more recent study by Professor Ning Zhu does confirm that medical debt has an impact, but that it’s a relatively small one. (You can download the actual study here.) According to Prof. Zhu, most bankruptcies are caused by"over consumption"-- e.g., buying a house or a car you really can't afford -- not a sudden economic upheaval like losing a job or being diagnosed with an expensive illness. Prof. Zhu found that only 5 percent of bankruptcies are caused by medical expenses. In the peak year of 2005, that would amount to 101,961 medical bankruptcies. That's right. Not 1.85 million. Not even 1 million. Just 101,961.
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Tuesday, August 19, 2008SCHIP Expansion Gets More ExpensiveBy Peter NelsonCategories: SCHIPCongressional Quarterly reports that SCHIP expansion just got a little more expensive, a fact that may influence whether Democrats choose to hold a vote on the Children’s Health Insurance Program Reauthorization Act in September. Because the Congressional Budget Office now estimates the proposed expansion will cost another $1.6 billion, the bill is no longer compliant with pay-as-you-go rules. Consequently, the bill will need some tweaking—cover fewer kids or raise more revenue—before it can be considered. CQ seems to think this may have “stymied” Democrats hopes of voting to expand SCHIP in September. Can an additional $1.6 billion on top of legislation already costing $35 billion really slow down the push to expand SCHIP? I'm skeptical.
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Thursday, August 14, 2008MN Health Dept. Posts 2008 Reforms SummaryBy Peter NelsonCategories: MinnesotaThis year Minnesota passed a broad set of health reforms that aim to promote healthy behaviors, align provider payments with value, standardize certain administrative procedures, expand Medicaid to more adults, encourage broader use of Cafeteria plans, mandate payment for medical homes, and require the adoption of e-prescribing and interoperable electronic health records. For anyone interested in the state's perspective on these reforms, the MN Deptartment of Health just posted a series of web pages summarizing them.
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Thursday, August 7, 2008Canadian Doctors Hold Lotteries to Decide Who Gets Access to CareBy Peter NelsonCategories: Single-Payer FolliesThe National Post reports on how some Canadian doctors have held lotteries to determine which patients to eliminate from their practices, while other doctors held lotteries to decide who they’ll accept. By shedding some patients doctors hope to avoid imposing a 5-minute appointment assembly line on the rest of their patients. Similarly, restricting new patients through a lottery keeps patient loads manageable. Both lotteries reflect the severe shortage of primary doctors in Canada -- yet another example of medical personnel shortages (and surpluses) that tend to crop up under nationalized single-payer health care systems. (Last year it was a nurse shortage and hospital consultant glut in the U.K.) After being kicked out of her doctor’s practice, one patient was forced to drive 18 kilometers to the next town to find a doctor. However, an 18 kilometer drive is better than no doctor at all. According to the article, "A paucity of medical professionals has left an estimated five million Canadians without a family doctor." The Canadian Medical Association sponsored website, MoreDoctors.ca, similarly estimates between 4 and 5 million Canadians lack a family physician. Canada’s population numbers about 33 million, meaning a little over 15 percent of Canadians go without primary care. Interestingly, about 15.9 percent of Americans are uninsured. Which is worse, no access or no insurance? Center of the American Experiment will soon publish the transcript of an interview with Lee Kurisko, a local Minneapolis doctor who once practiced in Thunder Bay, Canada. As a teaser, here’s what he had to say about Canada’s staffing shortages when I posed the following question:
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Wednesday, July 30, 2008Terminal Patients (and Their Families) Benefit From Straight AnswersBy Peter NelsonCategories: CaliforniaWhen I first heard Sen. Ted Kennedy had been diagnosed with a brain tumor my heart sunk to my heels. That’s what happens these days when I hear about any family hit by the same devastating disease that took my father’s life just over six years ago. The news stirs painful memories and a deep empathy that's hard to articulate. Being a frequent news item, Sen. Kennedy’s condition keeps bringing me back to a year I’d like to forget, but cannot and should not. Yesterday, for instance, The New York Times ran “The Story Behind Kennedy’s Surgery,” a report on how Sen. Kennedy came to choose surgery at Duke University when his doctors at Massachusetts General Hospital advised against it. It reminded me of my own family's recurring struggle to make a decision and then to live with it. The story also reminded me of a news magazine show, 60 Minutes I think, that profiled Duke University’s brain cancer research just weeks before my father died. My father, in no condition to even move from his bed, became convinced he needed to go to Duke because of the rosy picture they painted on their progress. At that point, I had a good sense for the state of brain cancer research, and I felt quite certain Duke exaggerated their performance. Maybe Duke thought they were doing good by spreading hope. (Then again, maybe they were just trolling for more research dollars.) But in my home that evening, Duke gave my father false hope for a reprieve and put my family in the very awkward position of denying him that hope. The story on Duke was, in my opinion, a very public example of the medical community not playing straight with terminal patients. Many doctors think it’s best to keep hope alive. However, Marilynn Marchione recently reported on new research that suggests honesty is still the best policy. The research shows that patients with doctors that discussed end-of-life care were no more likely to be depressed, less likely to spend their last days in a gloomy hospital, less likely to pursue futile and expensive treatments, and their families were more likely to be at peace. That was certainly my family’s experience. In fact, any time a doctor failed to shoot us straight it resulted in far more emotional stress for my family. The year my father died was filled with plenty of other experiences that exposed me to the best and the worst in America’s health care system. The truth is, those experiences, above anything else, are what motivate me to pursue and promote health care reform. With all that said, you might think I would be in favor of a controversial bill recently passed by the California Assembly that requires health care providers to give dying patients straight answers. I certainly understand the motivation behind the legislation. Patients and their families do deserve straight answers when death becomes all but certain. But, as a patient, I certainly don't trust California lawmakers or any other lawmaker to put end-of-life words in my doctor's mouth. Indeed, lawmakers have no business directing personal conversations between a patient and their doctor. Please, let's leave that to the medical schools, medical societies, a doctor's own conscience, and let's not forget the patient's responsibility too.
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Thursday, July 17, 2008A How-To Guide to "Make P4P Pay 4U!"By Peter NelsonIn this week's Journal of the American Medical Association, Drs. Rodney Hayward and David Kent offer doctors "6 EZ Steps to Improving Your Performance," a snappy how-to guide for "winning the pay-for-performance game." (Accessing the article requires a paid subscription.) Mind you, each step is just dripping with sarcasm and actually outlines how present P4P incentives can deter doctors from putting their patients first. Here are their 6 EZ steps:
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Monday, July 14, 2008Housing assets should help finance long-term careBy Peter NelsonCategories: Long-term care, MinnesotaA recent decision from the Minnesota Supreme Court documents how the average senior can qualify for Medicaid long-term care financing while still maintaining a substantial amount of assets in there home. In a commentary published on MinnPost today, I recount the facts of that decision and how federal Medicaid law can actually restrict states from recovering housing assets from the estates of certain married couples. More broadly, the case highlights maybe the last substantial Medicaid long-term care qualification loophole and reminds us that our public long-term care financing system is plainly not working. While the case is only binding in Minnesota, the case represents a sound interpration of federal law and will likely influence how other states interpret federal Medicaid estate recovery law. In fact, the message here is actually more important for other states to heed because Minnesota happens to be one of the few states that actively pursues assets from the estates of Medicaid recipients.
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Thursday, July 10, 2008Minnesota's New Medical Home MandateBy Peter NelsonCategories: Individual Mandates, MinnesotaMedical homes were an important part of the policy discussion in Minnesota this year. In a health care system that can often be fragmented and confusing, especially for people with complex or chronic problems, a medical home offers a health care delivery model where patients can receive more comprehensive and coordinated care from a primary care practice. Dr. Mike Ainslie, the Chair of the Minnesota Medical Association, describes a medical home quite aptly (and simply) as the place “where all of a patient’s care comes together.” Ideally, the medical home takes responsibility for all of the patient’s health care needs, either directly or by arranging and coordinating care with other professionals. The hope is that this type of care will create an ongoing and trusted relationships with patients, empower patients to make informed decisions, expand access through longer hours and more channels of communication, avoid duplicative services, reduce medical errors, and increase the use of preventive care. All together, patients should be healthier and less likely to need more expensive treatments in the future. To date, few primary care practices take on this added level of responsibility because public and private health plans don’t pay for it. Various medical home proposals in Minnesota would create a system to certify and license medical homes and then force public and private health plans in Minnesota to include medical homes in their networks and to reimburse medical homes a monthly management fee. The proposals differed on how to define the medical home and which health plans should be forced to integrate medical homes into their products. As these differences and issues took shape over the course of the legislative session, I offered these three recommendations for improving the medical home proposals: (1) The definition for medical homes should be flexible; (2) medical homes should be facilitators, not gatekeepers; and (3) medical homes should not be mandated. I go into much further detail on these recommendations in the paper, “Medical Home Policy Recommendations.” Unfortunately, the final legislation ignored most of these recommendations. While the legislation did allow for a more flexible definition, it gave too much power to the state to control the definition. Health plans were not given any freedom to define a medical home on their own terms. Most troubling, Minnesota health plans will now be mandated to include medical homes in their products and they must pay medical homes according to the state’s payment method. This adds yet another benefit mandate to Minnesota’s nation-leading list numbering 64. While Minnesota's government has not taken complete control over how medical homes roll out in the state -- a health plan could conceivably develop their own model and offer it alongside the state model -- it certainly risks discouraging health plans and providers from developing their own competing model. (How many health plans will want to confuse their customers with two medical home models?) Without competition, patients will play no role in deciding what a "patient-centered" medical home should be.
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Wednesday, June 11, 2008More issues with the Commonwealth Fund study of the underinsuredBy Peter NelsonCategories: HSAs, etc.Yesterday John Graham of the Pacific Research Institute outlined a number of problems with the Commonwealth Fund’s just released study that updates their 2003 survey indentifying the underinsured. Here's another issue: Using a high deductible as an indicator exaggerates the number of underinsured. (I touched on this point in an earlier post, but it's more problematic than I originally thought.) The study’s methodology classifies someone as underinsured if they meet one of three indicators of financial exposure, including: (1) Out-of-pocket medical costs equal to or greater than 10 percent of income; (2) medical costs equal to or greater than 5 percent of income for those with low-incomes under 200 percent of the federal poverty guidelines; and (3) a deductible equal to or greater than 5 percent of income. Lynn Blewett and Andrew Ward of the University of Minnesota and Timothy Beebe of the Mayo Clinic College of Medicine recently reviewed the academic literature related to the concept of underinsurance and found “great variation in the measurement and subsequent estimates” of what constitutes underinsured. Commonwealth Fund studies were the only reviewed studies that used a high deductible as an indicator of underinsurance. The deductible indicator hopes to measure "potential risk" of serious financial hardship. Using the deductible as a measure of potential risk raises three issues that exaggerate the number of underinsured. First, not everyone with a high deductible has the same risk of reaching the deductible because of the wide variation in health risks among people and so the deductible, by itself, is a poor measure of potential risk. For instance, a healthy 23-year old with a high deductible will be at a much lower risk than a similarly financially situated 54-year old with high blood pressure. By ignoring this distinction, the high deductible indicator likely includes people with incredibly low risks of ever reaching the deductible. Second, as the authors admit, some employers contribute funds to savings accounts matched with HDHPs to offset the deductible, which can eliminate any financial risk related to the deductible. Because the study fails to remove people with employer funding, it overestimates the number of people at financial risk from high deductibles. The authors dismiss the problem and claim that “recent studies find that most employers do not contribute.” But the study they reference makes the opposite point: most employers do contribute something. The authors must have mistakenly only considered employees with health savings account (HSA)-qualified HDHPs. It’s true that, according to their referenced study, only one-third of employers offering HSA-qualified HDHPs contribute to the savings accounts. However, HSA-qualified HDHPs only represent half of the HDHPs that enroll employees. Another type of HDHP, offered in combination with a Health Reimbursement Arrangement (HRA), enrolls the other half and, according to the study, all employers contribute to HRA accounts when they offer them. Consequently, the study cited by the authors actually finds that 66 percent of employers that offer HDHPs linked to an HSA or HRA contribute to their employees’ accounts. Third, without using some top-end income threshold, the methodology draws in a number of high-income people that are unlikely to be at risk. In the study, 9 percent of the underinsured have incomes between $60,000 and $99,999 and another 7 percent have incomes higher than $100,000. Over on quarter, or 26 percent of those added to the ranks of the underinsured by a high deductible had incomes higher than $60,000. Consider too that a 5 percent deductible would include someone with a $7,500 deductible who makes $150,000. It’s hard to believe that anyone with an income over $100,000 is truly underinsured. Despite these problems with the study’s methodology, we should not lose sight of the fact that many people struggle to afford medical care even when they have insurance. Some people are, in fact, underinsured and this group’s set of issues deserve serious attention. As a group, they will benefit most from policies that tear down barriers to affordable health care.
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