Lower Healthcare Spending, Better Health for Low-Income Americans

March 20, 2014

Now, here’s an interesting idea. We’re spending so much on health care because we’re under-spending on programs and services that make for a healthy population.

This is the thesis of a new book entitled The American Health Care Paradox. It’s not for the casual reader, and I confess I haven’t read it.

But public health professor and Health Stew blogger John McDonough provides a summary of the main argument, with eye-popping graphs. And we get another, broader overview of the research in slides the coauthors prepared for a conference last September.

The paradox the title refers to has been often discussed. The U.S. spends much more per capita on health care than any other highly-developed country — 50% more than the next two biggest spenders, according to recent figures from the OECD (Organisation for Economic Co-operation and Development).

But the outcomes don’t show it. Life expectancy is below the average for the OECD countries — lower, in fact, than all but eight of them, none nearly so wealthy as the U.S.

The U.S. also ranks very low on some other common health indicators — both maternal and infant mortality rates, for example, and the rate of infants born weighing dangerously little.

It’s common to attribute these, as the OECD does, to the fact that the U.S. is one of the very few developed countries without a universal healthcare system and to our extraordinarily high obesity rate – a function, the OECD suggests, of the many “disadvantaged” among us.

The American Health Care Paradox coauthors don’t dismiss these factors. But they’ve got a different explanation. Basically, we spend a lot on curing illnesses — or keeping people alive when we can’t, even when they’re almost sure to die very soon.

But we scrimp on what they call social services, e.g., education and job training, housing assistance, cash benefits for jobless workers and people with disabilities, support services for seniors and “family supports,” by which I suppose they mean things like high-quality affordable child care.

We spend less on these than any other OECD country. And our ratio of social services to healthcare spending is the lowest too. This, said ex-Wonkblogger Ezra Klein, helps explain why 5% of the population accounted for about half our healthcare spending in 2008.

Well, we’re moving bumpily (and imperfectly) toward an expanded, publicly-subsidized healthcare system. And we already have some evidence that the Affordable Care Act is slowing the growth of healthcare spending.

But at the same time, we’re in a cost-cutting mode on social services. The recent budget deal doesn’t alter this, since real-dollar spending for non-defense programs that depend on annual appropriations will be 15% lower this year — and 17% lower next year — than in 2010.

Spending isn’t the only issue. Our healthcare services move on one track and our social services on another — actually, on many tracks.

A child may show up in an emergency room on a regular basis, gasping for breath, despite the medications for her asthma. The treating physicians may suspect that mold in the home and/or fumes from the highway outside are triggers.

They’ll tell the parents, one supposes, if they’ve taken the time to talk about the home environment — and know how to listen. But linking them to a nonprofit legal service that will go after the landlord or to a public agency that could provide the assistance they’d need to move is generally not how a hospital operates.

There are some exceptions. As I’ve written before, a nonprofit called Health Leads fills “prescriptions” for food, heating and other assistance as a partner with physicians in the clinics where it’s located.

It aims, its website says, to “align the forces necessary” to change our healthcare system to one that “addresses all patients’ basic resource needs.” Forces do seem to be aligning in various ways.

Hospitals, for example, have begun tackling hunger as a health issue, as U.S. News reports.

A dozen in an Ohio-based system have been feeding local residents. The system itself has opened a grocery store with fresh produce, whole grains and the like in a food desert where one of its hospitals is located.

And some of its hospitals now screen patients for food insecurity and sign those at risk up for SNAP (the food stamp program) or give them a supply of groceries when they’re discharged.

Massachusetts General Hospital also screens for food insecurity and helps with SNAP applications, as do two of its primary care clinics. The clinics also enroll pregnant women and mothers of young children in WIC, operate food pantries and offer healthy meals cooking classes.

The Affordable Care Act provides incentives for hospitals to address public health issues like food insecurity, says the former executive director of one in Connecticut that serves low-cost meals to seniors.

Links to unaffiliated social services still seem limited, however, even though the American Health Care Paradox coauthors found that both healthcare and social service providers want the more holistic approach that linkages could provide.

They’ve got barriers to overcome, including insufficient resources. But investing in systems that would support collaboration — and in the social services themselves — would pay off in lower healthcare costs.

More genuine well-being for low-income patients too.


Year End Checkup for Shared Prosperity in DC

January 2, 2014

End of year seems a good time to look at how the District of Columbia is progressing — or not — toward becoming One City. So I turned to the indicators that the Half in Ten campaign published a couple of weeks ago.

We do see progress, especially if we look back to the first set, which, for the most part, shows where we were in 2010. But it’s a fragmentary picture — even more so if we focus only on the indicators Half in Ten could update, as I will here.

About the Indicators

Half in Ten chose the indicators in 2011, when it reset the clock for its original goal — cutting poverty in half in 10 years.

As I wrote at the time, they reflect a broader vision — not only less poverty, but more broadly-shared prosperity. For the latter, Half in Ten defined three priorities — creating good jobs, promoting family economic security and strengthening families and communities.

It picked 10 indicators for states and the District, presumably based in part on data it could directly access or secure from other organizations.

Even so, some of the data in latest set aren’t as current as one would wish. And the good job indicators are largely indicators of people who’d qualify for good jobs, rather than the extent to which such jobs are available.

The online report is still, so far as I know, the only single source of so many figures that allow us to measure progress toward social and economic justice.

The report also provides two bases for assessing each state-level figure — a best-to-worst numerical ranking and a better-or-worse figure, based on what Half in Ten calls the “U.S. average.” This is apparently another term for the nationwide rate.

I’m a bit queasy about comparing the District’s rates to the averages. (See note below.) But I’ll use the averages because they may provide a useful perspective. The rankings, as I’ve said before, are an apples-to-oranges comparison, so far as the District is concerned.

Poverty Reduction

As you may already know, the poverty rate in the District was 18.2% last year. This was about 3.1% higher than the U.S. average, according to Half in Ten.* But it was 2% lower than in 2010.

The child poverty rate shows more progress. It was 26.5% in 2012, as compared to 30.4% in 2010. But it was 5.5% higher than the U.S. average. And that, obviously, was alarmingly high too.

Access to Good Jobs

The unemployment rate in the District 8.9% last year — 0.8% higher than the U.S. average. The rate in 2010 was 9.9%.

How much of the dip indicates more residents working is an open question, since the rate doesn’t include jobless workers who’ve given up looking or potential workers who decided not to start. We know that they’ve been a major reason the national unemployment rate has dropped.

The disconnected youth rate, i.e., the percent of teens and young adults who were neither in school nor working, dropped from 17% in 2010 to 14% last year. This is 2% lower than the U.S. average, but the same as in 2011.

Economic Security

Health insurance coverage is one of the District’s strongest points. Only 9.14% of residents under 65 and below 138% of the federal poverty line (the cut-off for Medicaid eligibility under the Affordable Care Act) had no health insurance during 2012.

This is 8.6% lower than the U.S. average and 3.92% lower than the District’s own rate in 2011, the earliest year Half in Ten could report.

The District also does fairly well on food insecurity — at least in light of the poverty rate and the high costs of housing here. During 2010-12, 12% of D.C. households didn’t always have the resources to provide enough food for all members.

This is about 1.9% lower than the U.S. average and 1% lower than the District’s initial two-year rate.

On the other hand, only 17% of District residents who were jobless and looking for work in 2012 received unemployment benefits. This is nearly 11.7% lower than the U.S. average, though about 1.5% higher than in 2010.

It’s hard to know what accounts for such a low rate. One factor probably is that many laid-off workers in our thriving restaurant, hotel and home services sectors couldn’t meet the minimum earnings requirements for unemployment benefits.

Stronger Families and Communities

Just two updated indicators in this category — and neither altogether current. One is the teen birth rate, i.e., the number of births to women between the ages of 15 and 19 for every 1,000 in this age group. In 2011, it was 41.8 — about 10.4% more than the U.S. average. But it was 45.5 in 2010.

The other indicator is the number of children per 1,000 who were in foster care. In 2011, there were 16 — about 10.3% more than the U.S. average. But the rate was 20 per 1,000 only the year before.

These are not only indicators of family and community strength. The teen birth rate is linked to child and maternal health, to high school completion and thus to employment — and to poverty, though perhaps less as cause than effect.

Similarly, growing up in foster care has been linked to a host of later problems, including some flagged by the indicators here, e.g., poverty, disconnection from both school and work.

What’s true for these indicators is true for others as well. Each gives us a measure of individual and community well-being, but the measures are inter-connected in a variety of ways.

Which, I suppose, merely reaffirms the need for a holistic approach to both poverty reduction and a more equitable sharing of the prosperity in this very wealthy country.

* The source for the District’s poverty rate is the American Community Survey’s one-year estimate. However, the one-year estimate for the nation as a whole produces a smaller “worse than” difference than the Half in Ten figure I’ve replicated. By my calculations, the figure should be about 2.3%.


Budget Bill Fails on Unemployment Benefits, But Will Renew Health Insurance Help for Low-Income People

December 16, 2013

As I’m sure you know, the budget deal we’ve been reading so much about didn’t fold in an extension of the Emergency Unemployment Compensation program. And it’s highly doubtful Senate Democrats will upset the apple cart by adding it as an amendment to the bill the House passed.

The omission will, at the very least, make for a tough January for 1.3 million jobless workers and their families, who’ve got rent and other bills to pay. More harms to millions more if Congress actually lets the program die — not a foregone conclusion.

On a cheerier note, the budget legislation the House passed did fold in, via an amendment, extensions of two programs that benefit low-income individuals and families. Both, in different ways, help ensure that they can continue to get affordable health care.

They weren’t familiar to me. Perhaps aren’t to some of you either. So here are brief summaries, plus a bit of policy perspective.

The Transitional Medicaid Assistance program, as its name implies, allows some low-income families to get up to a year of Medicaid benefits when they’d otherwise lose them because their incomes boost them over their state’s eligibility threshold — typically just 61% of the federal poverty line, but far lower in about a dozen states.

TMA temporarily averts an unintended penalty to parents in the Temporary Assistance for Needy Families program who move from welfare to low-wage work — one of those so-called “cliffs” that works against a primary TANF goal.

Those whose income rises because they get a raise or an increase in hours can qualify, as can those who come to the end of a partial income disregard that some states and the District of Columbia provide so that earnings from work increase family income, rather than merely replace cash assistance.

The Affordable Care Act initially would have enabled the lowest earners to remain in Medicaid until they made enough to lift their families above 133% of the FPL — effectively 138%, for technical reasons.

Now that 25 states haven’t expanded their Medicaid programs — a choice the Supreme Court’s ACA ruling allows — TMA remains an important, though time-limited protection.

The program also affords some months of protection for very low-income parents when their child support payments rise — or for that matter, when the absent parent merely starts paying them. Here again, it’s diminishing a conflict between two government priorities.

The Qualifying Individuals program provides federal funding to states so that they can pay Medicare Part B premiums for seniors with incomes between 120% and 135% of the FPL. Younger people who receive SSDI (Social Security Disability Insurance) benefits also qualify.

The QI program is that last tier of premium assistance for low-income Medicare enrollees — unless, in some cases, they are disabled and working.

Part B, as you probably know, covers most of the costs of outpatient care, lab tests, “medically necessary” equipment like a walker or a blood sugar monitor and certain in-home, health-related services.

For most people, the Part B premium will cost slightly less than $1,260 in the upcoming year — a real bargain, but a strain on the budget of someone who’s total income may be about $13,790.*

No one in the Senate — except maybe a few of those “wacko birds” — will oppose the amendment that extends these programs, since it also includes the annual “doc fix,” i.e. a measure to forestall what, by this time, would be a 24.4% cut in Medicare reimbursements to physicians.

Senate Minority Leader Mitch McConnell reportedly objects to the whole budget deal, as do several other Republican Senators who are looking nervously — or hopefully — at their Tea Party constituents. But they can’t stop it from passing, even if they vote against it.

So two worthy programs will live for another year — both small, but important to those who benefit and to bipartisan interests in promoting work and controlling health care costs.

Not enough to make us stand up and cheer for a bill that could, in many ways, have been better — and not only because it leaves jobless workers in the lurch.

But if you look at Congressman Ryan’s latest budget plan, you can see that we could easily have been heading toward another government shutdown — and even greater pressures on programs that serve low-income people’s needs.

* This is 120% of the 2013 federal poverty line for a single person, rounded up.


Why Right-Wing Opposition to Obamacare Matters

October 9, 2013

I left off by remarking that hard-core opposition to Obamacare has damaged the program, though not blocked the rollout. Here are some examples, well-known and less so.

In the States

At this point, 22 Republican governors and legislatures have refused to expand their Medicaid programs, as the law required until the Supreme Court said it couldn’t.

Their unremitting hostility to Obamacare has left a total of 4.9 million of their poorest constituents no chance for affordable health insurance. An additional 1.5 million are in the same boat due to foot-dragging and other factors, e.g., recently-proposed alternatives to something less than a straightforward expansion.

At the same time, a goodly number of states are doing all they can to keep those who could get affordable insurance through one of the exchanges from knowing it’s available and choosing a plan that makes sense for them and their families.

The victims here will be largely low-wage workers, especially those who work for small businesses and/or part-time. Also some people who are genuinely self-employed and others whom employers misclassify as independent contractors.

In Congress

Meanwhile, it’s highly doubtful that Republicans in Congress will help fix glitches in the law so it works as intended.

One of the more problematic will leave some as-yet unknown number of families with neither affordable employer-sponsored health insurance nor a subsidy to purchase on an exchange.

This is because, as the law is written, a worker whose employer provides health insurance can buy on an exchange instead only if the plan is unaffordable, defined as more than 9.5% of household income.

But the percent applies to the cost of insurance for the worker only — typically just over a third of what a plan for a whole family costs, according to the Kaiser Family Foundation’s latest survey.

The General Accounting Office reports that the affordable standard will affect approximately 460,000 children — perhaps considerably more in 2015, when federal funding for the Children’s Health Insurance Program is due to expire.

Hard to believe Congress intended this. But the Obama administration says it’s “the most defensible” reading of the law as written.

In other words, it’s up to Congress to tinker with the language if it doesn’t want dependent family members uninsured — or workers begging employers to drop their health insurance plans and pay the modest penalty for not having one, if they’re large enough for the penalty to apply.

This isn’t the only glitch that’s come to light. The United Methodist Church and several other large church organizations warn that their health plans could fold because they can’t be offered on the exchanges, where their clergy and other employees could have the costs subsidized.

Washington Monthly bloggers Anne Kim and Ed Kilgore say that, according to most “observers,” the exclusion of the church plans was simply an oversight.

Two Senate Democrats have introduced a fix. But a spokesperson for one of them doesn’t expect a vote because the push to repeal — or more recently, to cripple — Obamacare “has disincentivized Republicans from working with us on this.”

And then, as you may have read, there’s an ambiguity in the law relating to Members of Congress and some of their staff.

They’re required to purchase health insurance on an exchange, although they were covered by their employer (the federal government). Now some Republicans are saying that said employer can’t continue paying a share of the insurance, as the Office of Personnel Management decided it would.

But Senator Charles Grassley (R-IA), the original sponsor of the provision, says that the law “makes no changes to the employer contribution.” He calls the law’s silence on this “a drafting error.”

Under ordinary circumstances, Congress would have simply put a little patch in the law to clearly authorize what the best evidence indicates the majority intended.

Instead, a majority in the House and some in the Senate want to force their staffers to pay many thousands of dollars more than the average private-sector worker pays — merely to stir up resentment over a so-called “exemption” that’s nothing of the sort.

We’ve got a somewhat similar problem with subsidies for people who purchase health insurance on an exchange the federal government is operating because their state wouldn’t.

The Cato Institute’s Michael Cannon, who abhors anything that smacks of universal coverage, and Jonathan Adler, a libertarian law professor, claim the subsidies are illegal because the law restricts them to state-run exchanges.

And one can read the law that way, though other legal experts have argued — persuasively, I think — that it’s demonstrably contrary to what Congress intended.

Here again, in ordinary circumstances, Congress would fix what even Cannon and Adler refer to as a “glitch.”

Instead, we’re going to have, at the very least, taxpayer money wasted defending a rule that protects many more Americans from having to go without health insurance because they can’t pay the market rate.

The basic issue here is that any major law, especially one that strikes out into new territory won’t be perfect as initially enacted. Witness the initial limits in Social Security, for example.

But so long as a majority of Congressional Republicans want Obamacare to fail — and there are enough of them in Congress to control what passes — we’re stuck with what we’ve got.


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