Health Wonk Review offers a summary of some of the most provocative health care posts of the preceding two weeks. The newest edition went up today, and it’s hosted by the “Disease Management Care Blog’s” Jaan Sidorov here

Highlights:

Over at “Health Affairs,” Timothy Jost, a law professor at Washington and Lee University and co-author of Health Law, the nation's standard textbook for that subject, offers lucid in-depth analysis of yet another section of the Affordable Care Act (ACA): the temporary high risk health insurance pool.  Under the reform legislation insurers will not be able to deny coverage to customers suffering from pre-existing conditions—but that provision doesn’t kick in until 2014.  To bridge the distance between now and then ACA offers a temporary high risk pool known as the Pre-Existing Condition Insurance Plan, or PCI.P.  The program can be run either by the states or by the federal government through a nonprofit entity.  Twenty-nine states plus the District of Columbia chose to operate their own plans, while HHS will administer the program in 21 states. The federal PCIP  is in fact already taking applications, as are several state plans.

Both American citizens and others “lawfully present in the United States who have been uninsured for at least 6 months and who have a pre-existing condition are eligible for coverage.”   Congress appropriated $5 billion to fund the program through 2013.

“The PCIP program suffers from widely acknowledged defects,” Jost observes.  “First and foremost, it is badly underfunded.  In a June 21 letter, the CBO estimated that $10 to $15 billion would be needed to fund the program adequately through 2013.  The CMS Actuary estimated that the appropriated $5 billion would be exhausted in 2011 or 2012. The PCIP is a prime example of the short-sighted fiscal conservatism that drove the legislation.  It is bound to cause serious political problems when the funding runs out well before 2014.”

In addition, while the standard premium will be lower than the premiums charged by current state high risk pools, the six month rule will make it difficult for patients trying to make a smooth transition from one those pools to PCIP.  Moreover, Jost adds, “the premiums — and the cost sharing required under the statute — will be unaffordable for many lower income Americans. The statute offers no assistance to those who cannot afford its coverage.”

Nevertheless, he concludes, a flawed PCIP represents an improvement over the status quo:  “Although much has been made of the underfunding of the program and other coordination and access problems noted at the outset, one thing remains true.  Several hundred thousand Americans with serious health problems who otherwise would have lacked health insurance will be covered by the program for as long as the funding lasts.  For many of these individuals, coverage will mean the difference between life and death.  For many more coverage will mean reduced morbidity and better functioning.  The PCIP program will allow many others to avoid bankruptcy.  It will also reduce the burden of uncompensated care borne by providers and ultimately shifted to insured Americans or to state and local governments.

“It is easy to criticize the PCIP program.  But for many Americans it will be the most important opportunity offered by the Affordable Care Act”.  You will find Jost’s full analysis here
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Autstin Frakt, author of the always insightful “Incidental Economist,” offers a much-needed summary of what has been happening Massachusetts since passage of its health reform law, correcting some of the misinformation that has been littering the blogosphere.

“During debate over and since passage of the Affordable Care Act (ACA), there has been some concern over whether the individual and employer mandate provisions will work,” Frakt writes. “Will employers drop coverage in large numbers once their workers can purchase insurance through exchanges? Will enough individuals game the system–purchasing insurance only when sick–to destabilize those exchanges? If the Massachusetts experience is any guide, the answer to both questions is ‘no.’

“At first glance one might think the ACA’s and Massachusetts’ mandates wouldn’t work because the penalties for noncompliance are low,” he observes. For example, the employer mandate in Massachusetts has a very weak penalty, just $295 per employee per year,  far below health insurance premiums and the ACA’s penalty.  But employers have not been dropping coverage in Massachusetts. (For supporting evidence see Jost’s full post )

“Turns out the individual mandate is working fine too,” he adds. “Although there are individuals gaming the system in Massachusetts—by waiting to purchase insurance until they need it–the overall coverage rate is high (about 95% insured) , and the associated degree of adverse selection is very low (meaning insurers are able to cover medical costs with premium dollars, a necessary condition for a stable market).

“In a recent report released by the Massachusetts Division of Insurance, actuaries estimated that part-year insurance purchasing in Massachusetts’ combined individual and small group market increased premiums by 0.5 percent to 1.5 percent. Based on an average individual premium in Massachusetts of about $5,000 per year, that translates into an annual premium increase of $25 to $75, far too low to have a major impact on the market. Insurance companies can pass that level of premium increase on to consumers without many of them dropping coverage.

“Thus, there is reason to think gaming won’t be an issue with the national individual mandate. First, the ACA’s penalties for lack of compliance with the mandate are actually higher than Massachusetts.” Second, under the Accountable Care Act, “exchanges will have open enrollment periods, which don’t exist for the Massachusetts version of an exchange right now. Restricting the enrollment decision to a once-per-year event reduces the ability for individuals to time coverage to coincide with illness. There are, of course, differences between Massachusetts and other states that may cause results to vary.

“Note that I am not saying that everything about the health care system in Massachusetts is wonderful,” Frakt cautions. “The Bay State still has a health care cost problem and no agreed upon solution to it, for example.” [Thanks, in part, to high prices at prestigious hospitals, and the fact that is it much easier to make an appointment with a well-known specialist than with a primary care physician , health care in Boston is more expensive than in any other spot on the globe. And unlike the ACA, Massachusetts’ health reform legislation focused on universal coverage, without trying to cut the underlying cost of care.] “Nevertheless,” Frakt writes, “the individual and employer mandates are functioning as designed in Massachusetts, even with lower penalties than will exist under the ACA.” 
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Writing on New America Foundation’s “New Health Dialogue” Joanne Kenen argues that despite all of the talk of repealing or at the very least dismantling the Accountable Care Act, states of various political persuasions are preparing for the reality of reform. And Kenen isn’t theorizing; a veteran reporter, she picked up the phone and talked to folks on the ground.

 “After talking to both state government officials, and political analysts, and researchers, and advocates in several states across the country, I became increasingly convinced that we have parallel universes in the states,” says Kenen.  “On one hand, conservative politicians are vowing to repeal, refund, roll back health reform — I came to think of them as the "over-my-dead-body" school of health reform. Then we've got state insurance officials and Medicaid directors and foundations and state legislators and health care providers who are getting to work, already investing huge amounts of time laying the complex technical groundwork for reform. . . .
  They are doing everything from starting to redesign Medicaid office software to conceptualizing how to harness insurance exchanges to catalyzing delivery system reform. In red states and blue.”

As examples, Kenen points to: “Wisconsin where a Democratic governor — for now — has already done a lot of work on coverage expansion,” and “California, where a moderate Republican governor is working with a Democratic legislature to move ahead on exchanges,” and “Georgia, where the Republicans who dominate state politics are highly anti-reform but where there are still some on-the-ground signs that they may move ahead (albeit on a more limited and conservative track).  In other words, despite the rhetoric, there are strong signs that states across the political spectrum do recognize that health reform is the law of the land and they need to get cracking.” Read her post here.
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On Health Care Renewal, the intrepid Roy Poses takes on CEO salaries at non-profit hospitals. It turns out that even at a small hospital, an executive can count on hauling home more than a half million: A report “by the Payers & Providers healthcare business publication suggests the base salary for  a sampling of CEOs” in California  averaged $514,237,” Poses observes. “Kick in bonuses, retirement money, reimbursement for education costs, expense accounts and the average total compensation hit $732,004.”

Economist Sung Won Sohn explains: “When you try to get somebody at $400,000 rather than $700,000 you will get plenty of takers but they’re not competent,” he said. 'Hospitals are so important in the community that you want to make sure it’s run properly.”

Maybe hospital boards should forget about looking for MBAs and try interviewing candidates with a degree in, say, public health?  Or consider primary care physicians or general surgeons who have spent two or three decades working both in hospitals and in private practice?  Nurses with years of management experience also have shown that they can do a fine job of running a hospital.

They don’t have enough experience running a bureaucracy, you say? That might be all to the good. If hospitals were less bureaucratic, they would be more patient-centered.  And a hospital CEO has understands the problems that doctors and nurses face is likely to have more rapport with caregivers. Finally, my guess is that you’d find plenty of excellent candidates in each group who would not turn up their nose at $400,000.

Of course, $700,000 is a drop in the bucket compared to the average hospital’s annual operating budget. But, I would argue that in any corporate culture, excessive salaries send a message: “We have money to burn.”

Moreover, in the aggregate CEO salaries at non-profit hospitals add up. Poses turns to Ron Shinkman, author of the Payers & Provides survey on CEO salaries in California, who points out that: Federal regulations already limit compensation for CEOs of corporations bailed out by the government to $500,000. Similar caps placed on nonprofit hospitals could create dramatic differences: “’You’re looking at close to $39 million that could be used on uncompensated patient care. It’s a lot of money.'”

“Consumer advocates aim much of their concern at nonprofit hospitals that not only reward CEOs with lucrative paydays but also provide little charity care to poor, uninsured patients,” Poses adds.  “The Payers & Providers research identifies 17 hospitals” in the state “where the total compensation to CEOs exceeded the cost of charity care.”

Poses quotes Anthony Wright of Health Access California: “'It would be outrageous if hospitals are paying more to their (entire) executive teams than in indigent care in their community. For some hospitals to provide more to one individual just seems wrong.’”   Read Poses post here,