Thursday, August 29, 2013

Obamacare Disappearing Already?

TPM today has a nice collection of ads for the various health care exchanges. Except the word "exchanges" isn't mentioned in the ones that I looked at. Nor are words such as "Obamacare." Or "Affordable Care Act." Or even "government." A couple of them did hit on the word "affordable," I suppose.

Which is as good an excuse as any to trot out again my claim that if the ACA works, it will disappear. That is, few will realize that they've had any interaction with "Obamacare" at all. They may be only marginally more aware of the government's role in making health insurance affordable than most employees with good (government subsidized, through the tax code) employer-provided health insurance are now.

Seriously: watch a couple of the ads. How many people do you think will associate the Hawai'i Health Connector with Obamacare? I'm thinking no more than 10, 15%. Could be a lot less. Even, I'm guessing, when people actually go to the web site once it's up.

Of course, the other half of this I've been talking about is that while the actual program disappears, the mythical one can live on, at least within the conservative information feedback loop.

And if things go wrong -- whether it's glitches with the software, or larger problems -- then it won't be invisible at all.

But mostly, I think the odds are that it will work reasonably well, and most people will wonder what ever happened to Obamacare.

19 comments:

  1. So, not realizing what it is, will people continue to vote for politicians who promise to repeal Obamacare? Or will politicians, because they do know what it is, come to fear the repercussions of repealing it and causing their constituents unexpected headaches? Or will some politicians just keep on trying to repeal it anyhow, whether in the name of true liberty or in the name of preserving it for future generations?

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    1. To answer your first question, probably. A lot of people seem to vote for Republicans who vow to cut Medicare because "Obama wants to cut my Medicare" right?

      I've also noted that the individual mandate has become the flagship of Obamacare while most people, even from folks wanting to repeal Obamacare, don't talk about stuff like community rating etc. I could see "Obamacare" becoming short hand for just the mandate while all the other legion of reforms just become part of the status quo, the same way people think getting insurance through the workplace is normal.

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    2. But will the partisan voters' desire to repeal Obamacare (not knowing what it is) be canceled out by the politicians' realization that repealing it will destroy their constituents' Kynect/Hawai'i Health Connector/etc., and make them mad?

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    3. Politicians only need to worry about making their constituents mad to the extent that said constituents correctly assess blame. If they don't understand the ACA and if politicians and media continue to confuse them then the risk of angry voters is minimal.

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  2. Does this mean people will look baffled at Obama and Hillary in 2014-16 when either of them, under the banner of the Democratic Party, during campaigns and speeches, take credit for improvements or for continuing to support the issue of affordable, universal coverage? "Uh, whatever, Obama, while you've been jawboning for years about Obamacare. My state just set up their own program! Thanks for very little."

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  3. On another blog a few days ago, I got into a brief discussion with some commenters over the moral question of whether people should be informed about the source of these benefits. Some commenters were upset the reporter at the Kentucky Fair didn't educate the fellow who expressed interest in Kynect while bashing Obamacare. Others pointed out that giving him this information might encourage him not to sign up ("You mean it's those dang Kenyan death panels? No thanks!"), thus potentially endangering his health.

    (Of course, based on my experiences, I suspect this person would have simply refused to believe the reporter.)

    If those implementing the law are not exactly going out of their way to make people aware of its identity, that may be in part a strategic decision to avoid turning off potential beneficiaries whose prejudices would stop them from using it. Some liberals may think, "Well, good riddance," but the fact is that the more people sign on, the more successful the law is likely to be.

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  4. Also, I decided to take a look at Kynect's website, and not surprisingly, I found no mention of Obama, Obamacare, or the Affordable Care Act. The site's FAQ makes only one fleeting reference to federal law and mentions the governor's decision to set up the exchanges as if it were his own policy:

    "2. Why was it created? Governor Steve Beshear issued an executive order to create a state-based health benefit exchange to best meet the needs of Kentuckians."

    None of this should be too surprising in a solid-red Southern state like Kentucky (though Gov. Beshear is a Democrat), but it does illustrate how the law's implementers seem to be avoiding telling people about the connection between the benefits and Obamacare.

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    1. In contrast, the website for the exchange in New York (where I live) states right off the bat that it's a result of the Affordable Care Act.

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  5. The best of the ads actually touted exchanges as a state program -- with no hint at all that this was a federal plan. From a marketing perspective (that is, in terms of getting people to actually participate) I think it was good strategy. The best also touted these plans as something helpful to people leading productive, active lives -- rather than as a benefit based on need. Again, a smart way to proceed.

    I couldn't help but wonder if the more local, more positive approach was influenced by and indicated a more positive political environment for reform in those states -- a political environment that sees reform as something shared in and beneficial to all, rather than as something some are being forced to provide for some others.

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  6. This phenomenon does cut both ways, it seems to me. Hiccups that arise as a result of the law will be pegged to the law, even if they weren't the intention. Classic illustration: "Obamacare will prevent you from seeing your preferred doctor!"

    Bollocks, certainly. What Obamacare will do is expand Medicaid with federal guarantees, or I should say "guarantees", as they are only as good as their ability to resist Boehner extracting them in the next debt ceiling fight. When that happens, the burden will fall back on the states, which will throw up their hands and make further drastic cuts to doctor reimbursement under Medicaid. Given that low reimbursements are already causing widespread resistance to taking Medicaid patients - well, *something* will be making it significantly more difficult to see your GP. Is it Obamacare? Not according to the law as written. Will the people know the difference?

    Its not only the flimsy nature of Medicaid guarantees. There's also the IPAB, tasked with finding the massive efficiencies available vs. Big Health Care, which is apparently not only evil but also really stupid. You know the IPAB is gonna meet its targets, even if it means they'll have to further squeeze reimbursements beyond the Medicaid issue. Which will, of course, make it harder to see your GP.

    Once again - not Obamacare, at least as the law is written. Says here the hoi polloi won't particularly care.

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    1. @CSH: it's not that "Big Health Care" (!) is either evil or stupid: it's that there is no such thing as Big Health Care, but rather hospitals, individual care providers of all sorts, insurance companies and agents, medical device makers and salespeople, pharmaceutical researchers, manufacturers, and salespeople, and so forth. You can bet each of these groups contains a large number of people who think the other groups are wasting money all over town, and a larger number who would think so of they were looking into the matter. To some degree they just don't care (no skin off the doctor's nose how much a device costs, devicemakers aren't interested in curbing pharmaceutical copyright extensions, from an insurance perspective nothing has a determinate price anyway, &c., &c., &c.), but whether they care or not, to a pretty large degree they really don't have any input. The idea of IPAB, as I understand it, is that when you have representatives of many such different groups (including of course the patients) looking over the procedures together from a holistic point of view, you become capable of putting a different kind of pressure on each group than it's felt heretofore. Profit incentives can be pursued in many different ways, yeah? -- so IPAB -- or, as seems to be already happening, the threat of IPAB, the knowledge that of all the ways out of our heretofore swamp, this is the one we've collectively chosen -- that gets these groups to think more carefully. It's not really any different than a few decades ago when so much technology was engineered without reference to the amount of fuel it used up. Looking back you wonder: how can they have been so -- as you put it -- "massively stupid?" But they just weren't feeling any pressure from that direction, until oil became much more expensive and people started acknowledging the societal costs of coal and things. Once companies decided they cared about the cost of fuel, they got a lot more efficient very quickly. Many of those efficiency improvements were sitting there equally available forty years ago, but no one making the decisions was looking for them. (I read an article about airline fuel efficiency that was all about this. Depressing.) Similarly, IPAB is intended to make some parts of medical care more expensive. It just shifts a set of markets, it doesn't suppress them.

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    2. classicist, think of it this way: when you go see your GP, you receive a bill for that 15 minute visit, and assuming you are in your copay, you will discover that your doctor charged you $128 for that service, but because you are a member of Humana, it will cost you $55.

      Baked into that $128 are various and sundry components of the complex health care system to which you allude; the $55 it costs (first you, and then your insurer when you're out of your copay) is the outcome of that system having been squeezed over several generations.

      For the sake of argument, let's assume that the IPAB has, baked into its assumptions, the idea that their scale of governmentness or whatever can get that $55 down to, say, $40. This begs an obvious question: why hasn't profit-motivated Humana done the same?

      The answer, I think, is obvious: because they can't. Not "can't" as in don't have scale, but "can't" as in, at $40 per 15 minutes, many many doctors would exit, which would too negatively impact revenues to make the cost savings beneficial. This, I think, we all know.

      To be sure, its not that the IPAB doesn't have a different scale than Humana, they certainly do. As the ACA is a first step toward single payer, the IPAB certainly gains a type of fiat power to force $40 per 15 minutes on your GP (which will of course depress doctor compensation, for those who stick with it).

      The bigger issue, though, is that the $55 per 15 minutes that the Humana/BCBS member pays is the result of years and years of the doctors getting squeezed, and implicitly all the other parts of the health care supply chain you mentioned. Yes, the federal government would have somewhat more scale in that effort than an oligopoly of a few giant firms.

      Somewhat, but not much. Surely less than the ardent supporters of the IPAB think. But the IPAB can still get there.

      Because the biggest difference between the IPAB and BC/BS is that the IPAB doesn't have a revenue line, so they shouldn't care the same way if GPs disappear on the way to their savings goal.

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    3. @CSH -- thanks for replying. To me though it seems as though your argument bumps up against the reality that in the past couple of years health care costs have, actually, grown distinctly more slowly than expected, and than they had been. Obviously, if cutting has happened, then there was room for cutting. It didn't happen before because it was easier for insurers and hospitals to increase profits by raising premiums and cutting benefits than to increase profits in ways that might antagonize providers and the supply chain. That's what my fuel-efficiency example was supposed to illustrate: looking back, it seems shocking that airlines had so many resources available to use less gas but didn't bother to seek or implement them -- but then -- why would they have, when they were already making healthy profits, when easier sources of profit were so readily apparent? Or here's another example, from academia. University administration has positively exploded in the past few decades in ways that no sane person looking in from outside of university administration can make sense of, let alone justify. This costs zillions of dollars that could be going to improving students' experience and (in the case of research institutions) facilitating more research. Iow the growth of administration has been in visibly direct conflict with the two MOST important things in higher education, whether from an idealistic "what is academia for?" or from a financial "build the brand, compete with peer institutions" perspective. Direct conflict. But universities don't care because they can just keep raising tuition for students, hiring adjuncts with low pay and no benefits (or increasing the number of graduate students with low pay but benefits, but who will also contribute to the ph.D. glut that lets universities hire labor so cheaply) instead of TT faculty, simply hiring fewer faculty and increasing class sizes, relying on Federal student aid funding, in some cases relying on alumni donations, and whatever else seems to be the lowest-hanging fruit. Used to be that cutting money from women's athletics was low-hanging fruit, until Title IX. But government policy can change what's low-hanging fruit! Policy can change what seems the obvious place to look for savings.

      Maybe I can put the point more abstractly: of course institutions are looking out for their interests, but why would we expect them to find every opportunity, in the face of status quo bias, peer pressure, and little perceived pressure to find new areas of opportunity? After all, they're composed of people who deliberate on the basis of those and other factors ... And btw, this strikes me as a quite conservative line of thought ...

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    4. Interesting discussion, classicist, thanks for taking it up, and interesting you bring up academia, as it differs from industry in at least one important respect: the brand is a king-maker, at least at elite universities, and it provides a much more powerful moat than any business could ever dream of having.

      I was thinking about this during Obama's noble, but quixotic, bus tour to re-evaluate universities. It is 'nice', fwiw, to score schools on updated factors; unfortunately, no one is going to use those scores. For example, if the Bauxite Corporation of Western New York is looking to hire entry-level management, it may be that a candidate from SUNY Buffalo is more 'impressive' (ymmv) than the Cornell candidate; perhaps Obama's coding will declare that SUNY Buffalo is, all things considered, the "better" school (whatever that means).

      The folks at Bauxite won't care about any of that; if the price is right they'll always hire the Cornell grad because Cornell is Cornell and no one in HR has to apologize for that. Cornell is certainly aware of this. Not necessarily Cornell specifically, but that all-too-familiar moat probably encourages all manner of questionable behavior in elite academia that private, "moatless", industry - big health included - wouldn't dare try.

      And then cost savings. I can't say for sure why airlines didn't bank the cost savings earlier, other than that an airline exists as one cog in a rather complex supply chain, with something like fuel efficiency standards requiring a fair bit of cooperation from airline manufacturers, oil and gas suppliers, and the rest. How much power the airlines have in that system goes a long way to determining how and when those savings are banked.

      I will say, though, at the risk of pretense, that I have a bit of experience working in supply chain for The Man, and though it wasn't the Healthcare Man, I'd be just about willing to guarantee that BC/BS and Humana have a VP of Operations who is very well compensated and whose compensation is very much at risk depending on how much savings their organization delivers. In all likelihood not just the VP; in all likelihood it has been this way for several decades.

      So sure, Humana "writ large" may not think all that often about the low-hanging fruit in obscure parts of the supply chain; there can be little doubt that some highly-placed manager has lots of compensation at risk for plucking that fruit. Again, it has surely been like this for decades.

      Yes, government policy can change the low-hanging fruit - a little. Says here that the IPAB will, at first blush, overpromise and underdeliver...until they find a way to "deliver", and the people are unhappy with what they get.

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    5. @CSH:
      an aside, but...

      I followed your argument, I think, but not the moat analogy. Could you explain that analogy?

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    6. Matt, thanks for asking. Basically, I'm suggesting that the (fictional) Bauxite Corporation would give Cornell quite a bit of leeway vs. SUNY Buffalo. I'm not saying Cornell does, but certainly Cornell could make several "creative" (i.e. aggressively cost-saving) management decisions and still be perceived as superior by Bauxite (or any other entity comparing Western NY grads). Even if some at Bauxite or elsewhere began to suspect that Cornell was no longer all its cracked up to be, Cornell would still have quite a bit of leeway, as those private suspicions would be overwhelmed by the power of the brand for a long, long time (i.e. I may think SUNY Buffalo is more competitive with Cornell than it used to be, and maybe even Obama's ratings say it is so, but Cornell is still Cornell, and it would take a long long time for things to get to a point where anyone publicly questioned the hiring of a Cornell grad that didn't work out).

      In the context of this conversation, you might say that Cornell's flexibility is the equivalent of a Big Health Insurer cutting reimbursement of the GP back to $40 per 15 minutes. Except that Cornell can get away with it - a lot of it - that the Health Insurer can't. That's what I meant by the moat.

      If that made any sense.

      Thanks for asking, though.

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  7. I sit on a couple of hospital boards. I can say, without the least bit of hesitation or doubt, that much of the healthcare field has only very recently decided to tackle the cost side if the equation. Cost bending efforts in the ACA as well as dropping market shares due to recession have been driving this. But this is by no means a mature effort. There are plenty of operational expense reductions and efficiencies to be found.

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  8. Who believes " Obama wants to cut Medicare" ? Most people who have been following this administration's battle with congress since 2008, would know it is Reps who want significant cuts to Medicare ( and SS and every social program).
    I agree that the transition will be seamless in actuality, but every situational problem that occurs while getting adjusted will be loudly reported as an "I told you so" by the nay-sayers.

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