3 March 2017

Dear Interested Readers,

What’s Inside This Week’s Letter

President Trump may have surprised you when on Monday he told a meeting of governors at the White House, “Nobody knew that healthcare could be so complicated.” Is that fake news? It was in the New York Times, CNN, the Washington Post and all of the media that the President has attacked. Fox News also reported on the amazing comment, so it must be a truth with meaning that could represent common ground between people of all political points of view who could work together to solve a problem that everyone agrees is real. You can hear both the President’s statement and an interesting discussion between Bret Baier and Charles Krauthammer if you clicked on the last link.

Krauthammer said Trump should have known healthcare was the most complicated problem in politics. You knew healthcare was complicated. I spend many hours every week trying to keep up with healthcare because it is so complicated. Healthcare is known to be so complicated that in 2010 it famously took over 2,000 pages in the ACA to explain how we might improve it. Now, over six years later, some people have just begun to imagine what would happen if suddenly the law went away.

The next day after his epiphany on healthcare with the governors, the President announced in his speech before Congress that he has the answer that will give Americans, or some Americans who want to buy it, fabulous healthcare. We are getting to know him and are coming to recognize that in his world things appear one way on one day, and then the insight is forgotten and things are another way the next day. We are also beginning to recognize an emerging pattern. After a “flip-flop” occurs as it has with healthcare, Taiwan, NATO, or issues related to “the wall” or immigration, an administration spokesperson emerges to explain either that something was not really said, did not happen, or that we misunderstood what was said or that what we recorded did not occur. Somehow “fake news” or “alternative facts” explain why we think what was said or done really was not said or done.

In his speech which you can either view or read complete with annotations of “alternative facts” and clarifications of misinformation by NPR commentators, the President gave us the outline of his solution in five points near the end of his address to Congress. The points in the President’s speech were strikingly similar to the talking points that Paul Ryan gave members of Congress as they were leaving town for the Presidents’ Day Holiday recess. Those talking points were the subject of last week’s letter, and were reviewed in the posting earlier this week on strategyhealthcare.com. Check it out.

A lot happened during the week that Congress was at home. Many of those Republican members of Congress learned first hand in “townhall meetings” what polls have been showing since December. Seventy five percent of American’s want to keep the ACA until there is a better replacement. It has been over a month since a poll that showed that:

... The Associated Press-NORC Center for Public Affairs Research finds that 56 percent of U.S. adults are “extremely” or “very” concerned many people will lose health insurance if the law is repealed. That includes more than 8 in 10 Democrats, nearly half of independents and more than 1 in 5 Republicans. Another 45 percent of Republicans say they’re “somewhat” concerned.

I have been amazed by the presentations of late night talk show hosts like Stephen Colbert and Seth Meyers. The comics seem to be energized by every Presidential tweet and are scoring high marks from me for their understanding of the ACA and the threat to the health of the nation that its repeal would precipitate. Perhaps the most concise argument for the ACA was delivered by John Oliver on his HBO program last week. It’s less than thirty minutes and Oliver does a great review of Paul Ryan’s talking points! When he is finished it is hard to accept them as anything other than smoke and mirrors.

Another big item last week was the “leak” of Ryan’s bill that is about to be considered in Congress. The leaked bill apparently closely tracks the “talking points” that were released a few days earlier, but seeing the talking points as proposed legislation has upset some of the more conservative Republican members of Congress in the “Freedom Caucus” as well as Rand Paul, the libertarian physician Senator from Kentucky and Senator Tom Cruz from Texas who was the next to the last man standing in the Republican Presidential Primaries. All of them are concerned that Speaker Ryan’s tax credits amount to an expansion of entitlements. I think that is ironic since many analysts see the proposed tax credits as a woefully inadequate alternative to the funding of the ACA.

Part of this letter focuses on the inadequacy of the President’s healthcare plans as presented in his speech to Congress and the nation and then seeks to present an alternative view of what is wrong with healthcare and other ways to fix it. I did not know what to expect when I tuned into the speech at nine o’clock on Tuesday night. From the end of the President’s first two sentences through the remaining fifty plus minutes I was having a hard time with the manufactured sense of propriety that the President was trying to sell. It is a mistake to apply one’s inferences about intent to another person’s words and actions, but throughout the speech I kept thinking, “Fake it till you make it.” My emotions were mirrored by Amy Davidson in the New Yorker Today in an article entitled “The Shameless Expediency of the President’s Speech.” You can read the article or not, but she began her dissection of his shamelessness with his references to Black History Month, the desecration of Jewish graves, “and that shooting in Kansas City.”

Her condemnation was near the end of her first paragraph:

But it is worth pausing at that opening and reflecting on its political utility, its incongruity, its evasiveness, and, ultimately, its shamelessness—qualities that characterized the address as a whole.

This week’s letter uses the President’s speech as the jumping off point to further speculation about the “repeal and replace” process, but my main point is that Trump and Ryan are primarily using the cost of health insurance as the reason that the ACA is such a failure. I disagree. The cost problem lies not in the ACA, but is embedded in the structure and processes of healthcare. The problem with the expense of healthcare that creates rising premiums has multiple origins, but high on the list of causes is our acceptance of the waste and our suboptimal processes of care that characterize our industry. McWilliams and Schwartz make a related argument this week in “Focusing on High Cost Patient-- The Key to Addressing High Costs?” published in the New England Journal of Medicine. I will expand these thoughts in the words that follow in the next section. I am concerned that healthcare is so complicated, as the President says, that we are not discussing or solving the right problems.

I hope that many of you will push back against this letter with your own thoughts. I remain hopeful that some combination of voices from the crowd, a few concerned Republican senators and members of the House in response to their constituents and their own sense of what is right, the efforts of a free press, and the combined voices of healthcare professionals will lead to an improved ACA.

Playing Both Ends to the Middle

It was quite ironic but as the “talking heads” who analyzed the President’s speech and Governor Beshear's Democratic party response were fading into the 11 o’clock news on the channel I was watching, Verizon offered an advertisement that contained as much or more wisdom than anything that I had heard over the previous two hours.

Why promise something that you can not deliver? (Verizon Ad)

The President seems intent on delivering in the “first 100 days”, or at least initiating in the first 100 days, the delivery of everything that he promised during his campaign. His problem is that he finds himself in very complicated position. He made “populist promises” to America’s forgotten victims of economic inequality.

The press has taught us that his base is made up of poorly educated white men and women who live in the “fly over” states, the rust belt, the South, the Bible belt, and rural America. He won with a combination of the voters who lost out to the globalization and mechanization of manufacturing and trade, and the movement away from fossil fuels. He has a problem. The realization of many of his populist promises will cost a lot of money. Many of his suggestions run counter to the long established political philosophies of the stalwarts of the Republican establishment. Perhaps the two areas that will be most problematic for him in the tension between his promises and the views of many Republicans in Congress are healthcare and his proposed trillion dollar investment in infrastructure.

Trump’s populist promises made major sections of his speech read as if the words were from Lyndon Johnson’s speech to Congress describing the Great Society in 1964, Bill Clinton’s promises of a “bridge to the twenty first century” in 1996, or Obama’s audacity of hope speech in 2004 at the Democratic convention. In 1979 Jimmy Carter just told us to suck it up in his “Crisis of Confidence” speech, proving that savvy politicians should always try to find someway to put icing on the cake.

Despite President Trump’s words, and the fact that everyone commented on how much he “exceeded expectations”, I was left feeling as if someone was trying to sell me a bridge. Many of you were probably still listening 45 minutes into the speech when in his long presentation of promises and accomplishments, he finally got to healthcare. “Repeal and Replace” was his last big subject. It is amazing to realize that in less than 48 hours he had migrated from expressing with amazement how complex healthcare was to having a brilliant solution to a problem that had flummoxed every president since FDR.

Thanks to WBUR and NPR we have his words to examine:

Tonight I am also calling on this Congress to repeal and replace Obamacare —

(APPLAUSE)

— with reforms that expand choice, increase access, lower costs, and at the same time, provide better healthcare.

(APPLAUSE)

Wow! That sounds great. Let’s get a little color commentary on his start from Alison Kodjak, NPR Health Policy Correspondent:

Republicans in Congress took the first steps to repeal Obamacare in January. However, they’ve had trouble coming up with a replacement plan they can agree on. House Speaker Paul Ryan released an outline of the working Republican plan last week, but almost immediately some House Republicans said they would oppose the plan. And an analysis of the plan by McKinsey and Avalere Health presented to the National Governors Association last week showed that it could lead to millions of people losing their health care coverage.

The applause came in like rolling thunder as the President continued.

Mandating every American to buy government-approved health insurance was never the right solution for our country.

(APPLAUSE)

The way to make health insurance available to everyone is to lower the cost of health insurance, and that is what we are going to do.

(APPLAUSE)

The President and almost every politician believes that the problem is the cost of health insurance. Consumers complain about cost and politicians make the error or recognize the self serving political strategic benefit of inferring a causal relationship with the ACA. The real causes of the high cost of health insurance are a complex set of issues that predate the ACA. The ACA was a start at addressing the root causes of the expense of healthcare and by extension health insurance.

The response of most people to “Nobody knew that healthcare could be so complicated” was, “Speak for yourself Mr. President. A lot of people knew that healthcare was complicated.” A Lean exercise that always yields “gold” or at least some insight when you are looking for the “root cause” of a problem, as you search for plausible solutions, is called “the five whys.” You don’t even need to ask “why” five times to make headway in getting to the “why” behind the high cost of health insurance. Health insurance is expensive for many reasons, not the least of which are the waste in delivery and processes of care as now practiced. In the NEJM McWilliams and Schwartz describe new ways to look at processes of care, populations, and efforts to eliminate waste in our efforts to lower the cost of care which will lower the cost of health insurance. Not only is the President surprised by how complicated healthcare is, it is obvious that he is oblivious to the decades of effort and the resulting understanding that we have gained over the last sixty years from experience and analysis.

The President continues:

Obamacare premiums nationwide have increased by double and triple digits. As an example, Arizona went up 116% last year alone. Governor Matt Bevin of Kentucky just said Obamacare is failing in his state. The state of Kentucky, and it is unsustainable and collapsing.


The President is lifting extreme examples and expanding them as the experience of all states. New Hampshire has had a very positive experience since the passage of the ACA. We have reduced the uninsured from 11% to 5% and reduced the cost of care as described in a New Hampshire Public Radio report :

Trump last night highlighted the surging costs of individual insurance policies, including in Arizona, where some premiums more than doubled between 2016 and 2017. There were also huge spikes in cost in Minnesota (55%) and Oklahoma (67%), among other markets. On average, Obamacare rates jumped 25% this year, before factoring in tax subsidies.

For opponents of the law, these price increases make a compelling case that Obamacare has done little to make care affordable.

In New Hampshire, it’s been a slightly different story. The cost of a mid-tier health plan rose by only 2% this year. And since the Affordable Care Act marketplaces launched in 2014, monthly premiums have actually fallen. A 40-year old resident would pay $267 per month today, compared to $289 per month in 2014.

As terrific as the results in the cost of insurance is in New Hampshire and as high as the cost of care is in other states, it would be wrong to assign a causal relationship for either outcome to the ACA alone.

The President continues:

One third of counties have only one insurer, and they are losing them fast. They are losing them so fast, they are leaving, and many Americans have no choice at all. There is no choice left. Remember, when you were told that you could keep your doctor and keep your plan? We now know that all of those promises have been totally broken. Obamacare is collapsing, and we must act decisively to protect all Americans.

(APPLAUSE)

Action is not a choice. It is a necessity. So I am calling on all Democrats and Republicans in Congress to work with us to save Americans from this imploding Obamacare disaster.

(APPLAUSE)

The President is wrong when he says that Obamacare is collapsing or imploding. We do have a problem with the cost of care. The cost of care is high because of the waste, poorly organized processes of care, and perhaps the business practices of institutions and suppliers including insurance companies. The ACA has suffered as much from the continuous political attack from Republicans as from its own inherent design flaws. Much of the ACA was designed to offer pathways of improvement for the real issues. We do have a problem, and we do need to do something, but he is setting us up for a “fake solution” that is proposed because of flawed analyses driven by political agendas, and not by a search for a workable solution.

He continues:

Here are the principles that should guide Congress as we move to create a better healthcare system for all Americans. First, we should ensure that Americans with pre-existing conditions have access to coverage, and that we have a stable transition for Americans currently enrolled in the health care exchanges.

(APPLAUSE)

That sounds terrific. He never says how it will happen or how this “assurance” will be financed. The big deception is the phrase “ensure that Americans with pre-existing conditions have access to coverage.” Having access to coverage is quite different than saying that you can not be denied coverage or charged more because of a preexisting condition. If you get into the weeds of Ryan’s proposal that is now being leaked as “the bill”, you will discover that the “guarantee of the right to purchase” is lost if coverage is interrupted by an inability to pay.

Secondly, we should help Americans purchase their own coverage, through the use of tax credits and expanded health savings accounts, but it must be the plan they want, not the plan forced on them by our government.

(APPLAUSE)

The sneak preview of these tax credits or payments to those who do not pay taxes suggests that the amount will be woefully less than the true cost of the current coverage and subsidies available through the ACA. If you give me ten cents to buy something that costs a dollar have you done me a favor if I do not have ninety cents in my pocket?

Thirdly, we should give our state governors the resources and flexibility they need with Medicaid to make sure no one is left out.

(APPLAUSE)

Even many of the Republican governors are pushing back on this one. The amounts proposed are reported to be a fraction of what is needed if Medicaid is shifted to “block grants.”

Fourth, we should implement legal reforms that protect patients and doctors from unnecessary costs that drive up the price of insurance and work to bring down the artificially high price of drugs and bring them down immediately.

(APPLAUSE)

This sounds great. Tort reform has always been a diversionary tactic in the discussion of the cost of healthcare. I am convinced that there is some added expense to healthcare because doctors do practice defensively. That does not mean that you can finance universal coverage by limiting the payout on malpractice. Controlling the costs of drugs is a tricky question. Trump has not produced any program to achieve what he says is necessary. As they say, “The devil is in the details.”

And finally, the time has come to give Americans the freedom to purchase health insurance across state lines.

(APPLAUSE)

Which will create a truly competitive national marketplace that will bring cost way down and provide far better care. So important. Everything that is broken in our country can be fixed. Every problem can be solved. And every hurting family can find healing and hope. Our citizens deserve this and so much more. So why not join forces and finally get the job done and get it done right?

(APPLAUSE)

Wow! Sounds great! I know of no knowledgeable authority who believes that selling healthcare across state lines is practical or will change anything. I am sure the idea can muddy the water. It has been a favorite of Republican theorists for years, and has been debunked after it has been tried on a few occasions.

My administration wants to work with members of both parties to make child care accessible and affordable, to help ensure new parents — that they have paid family leave.

(APPLAUSE)

Lots of luck on that one before there is a Democratic majority in both houses of Congress!

To invest in women's health, and to promote clean air and clean water, and to rebuild our military and our infrastructure.

I get the military investment. The President will need to call off the harassment of Planned Parenthood by many in Congress to make good on the sentiment in the platitude about women’s health. He has already shot in the foot any opportunity to promote clean air and clean water with a few of his Cabinet appointments.

(APPLAUSE)

On this and so many other things, Democrats and Republicans should get together and unite for the good of our country and for the good of the American people.

(APPLAUSE)

A simple five point solution for a domestic issue that affects every American’s insurability and access to preventative care despite their previous medical history and the infrastructure of care in their community is a pretty grand plan and should be examined closely with a skeptic's eye.

In this week’s New Yorker Atul Gawande gives us an incredibly succinct snapshot of the moment in “Trumpcare vs. Obamacare.” He reviews all of the issues between Trumps promises and the governing philosophy of the majority of Republicans in Congress.

For orthodox Republicans, the central issue is, of course, taxes. Obamacare increased them, particularly for high-income individuals and for industries that profit from the expansion of coverage, to pay for the costs of reform. (The A.C.A. actually reduces the deficit.) Many Republicans have made cutting those taxes their top priority; others see preserving coverage as the imperative. Each side thinks the other is committing political suicide. But, with so many Americans beginning to recognize how much they stand to lose, the political equations are shifting.

Governance is forcing Republicans to confront the reality that repeal without replacement is untenable.reality that repeal without replacement is untenable. 

Writing the day after the President’s address in the Wall Street Journal, in an article entitled “How Trumpism Can Break the Medical Trusts”, Carl Havighurst, professor emeritus of law at Duke University and author of “Health Care Choices: Private Contracts as Instruments of Health Reform", suggests that much of our industry functions in the same ways that the “trusts” that populist politicians like Teddy Roosevelt were breaking up a hundred years ago. His analysis is not that different from my contention that there is much more to the high cost of healthcare than the ACA.

In truth the ACA is the easily blamable “scapegoat” that allows us to overlook or hide from the real issues that make the cost of care higher than it should be. The sad reality is that those who have so little to support them, and have so much to lose, will be the victims of the President’s simple 5 points that are no solution. His five points offer a solution that does not pass even a superficial analysis that would suggest that it could preserve the gains made under the ACA.

Most economist believe that at least twenty million people will lose their recently gained access to care. I believe we will see fewer people covered. Those who retain coverage through their employer or through whatever is left of Medicare will be paying even more than they are paying now. If Congress passes the bill that was leaked last week and is a nice match to the President’s five points, we will have lost all that has been gained since 2010 in our effort to achieve:

Care better than we’ve seen, health better than we’ve ever known, cost we can afford,…for every person, every time…in settings that support caregiver wellness.

The Weird World of an Early Spring

I really hate to see the winter going so soon. I love snowshoeing or just hiking through the woods wearing my “microspikes”. My lake is still frozen, but with days as warm as the low sixties I am not sure how long it will be before I see “open water.” On Wednesday morning I was stacking a new cord of wood in my shed by the lake when I was taken with the beauty of the scene of the fog coming off the ice in response to the warmer air. It was an ethereal vision that I hope that you noticed in today’s header.

In this section of the letter last week I commented on the fact that the Oscars were coming, and I was desperately trying to find a showing of “Moonlight” before the awards were announced. I did find “Moonlight.” It was on cable! I also said that the Oscar’s are my wife’s “Super Bowl.” Little did I know that the Oscars and “Moonlight” would finish as dramatically as the Super Bowl! I was expecting “La La Land” to be named best picture after Damien Chazelle won the Oscar for “Best Director” and Emma Stone won “Best Actress.” Warren Beatty did look a little confused but then Faye Dunaway just burted out “La La Land.” That was not a problem. It was no surprise. Then came the surprise.

Jordan Horowitz, the producer of "La La Land" interrupted the speeches of his colleagues and announced the big surprise. “Moonlight” is the winner! It was Tom Brady, James White and Julian Edelman plus even more surprise and uncertainty! I was sorry to hear on Wednesday that the two Price-Waterhouse employees who made the error that led to the confusion will never be back at the Oscars and will probably lose their job. As the President would say, “Sad!”

I will be walking in North Carolina this weekend. I am looking forward to seeing some blooms on some long walks with my brother and perhaps a few shorter ones with my 96 year old father. Wherever you are this weekend, I hope that you will find someone to share a walk and the weather, whatever it is, with you.