As Australia readies for the Federal Budget, Associate Professor Lesley Russell reviews President Trump’s 2020 Budget and a new Grattan Institute report urging the Commonwealth to establish a universal dental scheme paralleling Medicare.
In the latest edition of The Health Wrap, Russell also examines bundled payments for healthcare, a cautionary tale from the United States on the high cost of insulin, and efforts to address loneliness and social isolation.
Lesley Russell writes:
President Trump released his 2020 Budget on March 11. It contains some savage cuts, but a record $4.7 trillion in spending, pushing the federal deficit to $1.1 trillion.
The budget calls the approach “MAGAnomics” – but most economists outside of the Administration see it as more about ideology than politics, relying on “far too many accounting gimmicks and fantasy assumptions”.
The figure below highlights perfectly how the political ideology of the Trump Administration is expressed in the budget.
This proposed budget (which fortunately won’t be acceptable to the Democrat-led House) makes dramatic cuts in non-defence discretionary programs that would make poverty more widespread, widen inequality and racial disparities, and increase the ranks of the uninsured. It would also underfund core public services and investments in areas that are important for long-term growth.
Most egregiously, Trump’s budget breaks one of his biggest campaign promises to voters: that he would leave Medicaid, Social Security, and Medicare untouched.
Over the next 10 years, the Trump Administration proposes to spend $1.5 trillion less on Medicaid, $25 billion less on Social Security, and $845 billion less on Medicare. There are also plans to repeal Obamacare (again!) and impose work requirements on those receiving government aid. The $2.7 trillion cuts in safety-net programs proposed for the next decade is higher than those of any previous administration.
These savings are needed to fund Trump’s (repeated) request for $8.6 billion for the wall on the Mexico border, increased defence spending, including the new Space Force, and making the previously enacted tax cuts permanent.
Now Americans may not like socialised services, but they certainly like Medicare and Social Security, and the older cohort who receive these benefits turn out to vote. Increasingly political awareness in population groups that rely on Medicaid and from states that have seen the benefits of Medicaid expansion under Obamacare will also mean that the proposal to turn this program into a block grant will face severe obstacles.
There is some spending on needed issues. There are new fees on the e-cigarette industry to help combat a surge in under-age vaping, money to fight the opioid addiction epidemic (but orders of magnitude short of what is needed) and $291 million to “defeat” the HIV/AIDS epidemic (experts say this will not be remotely sufficient to meet the goal he announced in his State of the Union address: to nearly eliminate the AIDS epidemic in the United States within 10 years).*
And yes, $1 billion for a child care fund as championed by Ivanka Trump. To get this money, which is directed to the private sector, states would have to “establish targets for reducing unnecessary regulatory or other requirements that limit the supply or increase the cost of child care.”
The Trump White House has a lot on its plate these days – it remains to be seen if there is any appetite to take the legislative fight over the budget up to Nancy Pelosi and her warriers.
*To see just what it might take to deliver on Trump’s commitment to end the HIV/AIDS epidemic, read this New York Times article which highlights the problems a clinic in Mississippi faces every day.
Let’s discuss bundled payments
As the evidence builds that fee-for-service (FFS) payments support volume over value and do not support integrated care with a focus on improved outcomes, the focus is turning to a bundled pricing approach – where a single price is determined to cover a full package of care over a defined period of time, spanning multiple events and settings of care.
Numbers of healthcare treatment and management situations, including certain surgeries, chronic diseases and longer-term conditions, are amenable to a pricing approach spanning a longer time period than a single service.
This approach has been in effect in the US for some time in a range of areas. Some good background reading is here:
Miller H (2009). From volume to value: better ways to pay for health care.
Beaton T (2017). Why Bundled Payments Are a Popular Option for Healthcare Payers
NEJM Catalyst (2018). What are bundled payments?
An evidence report from the Evidence-based Practice Centers at the US Agency for Healthcare Research and Quality looks at the impact of bundled payments on healthcare costs and quality and at the effect of key design features.
The overall conclusion is muted: “For policymakers considering implementation of bundled payment programs, this evidence provides some support that the programs are likely to be an effective strategy for reducing health care spending. While the effects on health care quality are less certain, the available evidence does not support concerns about the worst potential adverse effects of bundled payment.”
In Australia, work in this area has not gone very far. In the Pricing Framework for Australian Public Hospital Services 2016-17, the Independent Hospital Pricing Authority declared its intention to investigate a bundled pricing approach for public hospital services.
I was alerted (via a Twitter response) to something that I had missed: in 2016, the Independent Hospital Pricing Authority (IHPA) convened an advisory group of jurisdictions, peak bodies, clinicians and consumer advocates to develop a bundled pricing approach for maternity care.
The report from this group was released in late 2017. It makes fascinating reading for those interested in healthcare financing and in improving maternity care. A number of models used overseas are explored, along with costs and issues in Australia.
It included a preferred bundled pricing model for maternity care and identified significant barriers to implementation of such a model. Still, as the report states, this work should serve as a guide to inform future policy decision making regarding the introduction of bundled pricing approaches in the Australian public hospital funding context.
Sadly, it seems nothing further has been done. This necessary work has apparently fallen into the “too hard” basket – stymied by lack of government interest, the entrenched positions of clinical stakeholders, failure to recognise the needs of patients and consumers, and lack of initiatives to tackle the difficult (if not wicked) problems of healthcare financing.
While there is growing awareness that GPs are not well remunerated for the work that they do, the recent level of debate on how this should be redressed highlights how much consultation, education and deliberation will be needed to make any changes beyond simply increasing Medicare reimbursements under FFS and adding more MBS items.
In a recent article in The Conversation, respected health economists Jane Hall and Kees Van Gool argued the case for bundled payments. The commentary that follows the article highlights the backlash (much of it simply reactionary, but some of it thoughtful) that anyone proposing such financing mechanisms (for primary care or for surgical treatment) must weather and address.
And on a related topic, Australian Doctor reports that the long-promised revamp of the Practice Incentives Program (PIP), once promised for 2016, has been delayed yet again, for the fourth time. The incentives for treatment of asthma, diabetes, for quality prescribing and for provision of aged care are to be scrapped for a single “quality improvement” incentive. It’s not clear what that means.
When life-saving medicine is unaffordable
In 1923, the discoverers of insulin sold its patent for $1, hoping the low price would keep the essential treatment available to everyone who needed it. That hasn’t happened; their gift to humanity has become a very profitable commercial enterprise.
Now insulin is becoming increasingly unaffordable in the United States and stories of Americans rationing insulin – and dying for it – have been making national headlines. At the Yale Diabetes Center, doctors recently found that one in four diabetic patients reported rationing insulin because of the cost. Very few of those patients were uninsured, but their out-of-pocket expenses still created a financial burden.
Most patients point the finger at the pharmaceutical companies, who in turn bring up problems with government regulations and insurance providers. You can read some of that detail here. Patients can have their costs covered by insurance (although increasing there may be limitations) and some patients get rebates, but the average monthly out-of-pocket cost for insulin for a person with type-1 diabetes in the US is US$210.
According to a report by the American Diabetes Association and the University of Southern California Center for Health Policy and Economics, between 2007 and 2016, major brand insulin list prices increased by 252 percent. Now, retail prices in the US are around US$300 for all insulins from the three major brands that control the market.
Cheaper brands are available, but each formula works differently for each individual. It can take years for people to feel comfortable managing their dosing with a particular brand and so switching brands is often not an option. You can read about these problems here.
Insulin manufacturers have been able to push prices up for two main reasons: first, because there is a growing demand for an essential medicine; and second, by adjusting reformulations (in a process known as “evergreening”) they have been able to keep their products under patent protection and keep cheaper generic versions off the market.
This is largely an American problem (you can see how prices for insulin vary internationally here.) President Trump has said that drug companies are “getting away with murder,” and his administration now has a blueprint to lower drug prices. But it’s much tougher on pharmacies than on pharmaceutical manufacturers and there’s been more talk than action on pushing it forward.
Fortunately in Australia the Pharmaceutical Benefits Scheme protects most people from outrageous costs for insulin. However, the American story highlights how carefully we must protect affordable access to such life-saving medicines.
When there’s a doctor or nurse in the family
Mounting evidence documents the stark correlation between income and health, yet the causal mechanisms behind this gradient are poorly understood.
A recent paper from Sweden (where formal access to health care is not an issue) offers some interesting insights on how informal access to health expertise (through having a healthcare professional in the family) contributes to this gradient.
It found that that access to intra-family medical expertise has far-reaching, positive health consequences, at all ages. These effects are larger at the lower end of the income distribution – precisely where access to expertise is scarcer. The authors calculate that unequal access to health-related expertise can account for as much as 18 percent of the health-income gradient.
The paper is a very useful read for those interested in the impact of the social determinants of health. It may or may not provide some answers. Interestingly, the report acknowledges that similar studies in the Netherlands have contradictory finding: that having a doctor in the family does not result in substantially increased access to care (on the contrary, it sometimes leads to less use).
I was amused that the paper finds that having a lawyer in the family does not improve health!
The authors highlight that, to the extent that the power of intra-family communication about health relates to trust or detailed knowledge about health and habits that comes with a long-term relationship, effective policies may need to strive to mimic these types of relationships.
One example of such a policy cited is nurse outreach programs with a strong emphasis on the continuity of care (yielding a long-term relationship). Also this work supports the importance of cultural and racial factors in such relationships.
As I read this paper, I thought about the consequences of these findings for Australia, especially the advantages that accrue when support is available to help individuals from disadvantaged families and communities obtain education and training as healthcare professionals.
Loneliness: a major health issue for some Australians
I’ve written about this topic before in The Health Wrap, but now it’s back in the news (you can watch the recent SBS Insight program here), I wanted to add in some new work on addressing loneliness and social isolation.
An article in The Guardian late last year reports that over a quarter of Australians rarely or never have someone to talk to. For the most part these are younger Australians (aged 15 – 25) and people aged 75 and over. VicHealth sees loneliness as a “public health challenge” that plays a bigger role in premature death than smoking or obesity.
In the United States, a committee of the National Academies of Sciences is investigating loneliness and social isolation in older adults. Four surveys (by Cigna, AARP, the Kaiser Family Foundation and the University of Michigan) have examined the extent of loneliness and social isolation in older adults in the past year, and now health insurers, healthcare systems and social service agencies are launching or expanding initiatives to address this.
But there is little data about what works; the effectiveness of existing programs is yet to be rigorously evaluated. It turns out that assuaging loneliness is not just about having random human contact, it’s about the quality of that contact.
A recent publication from Kaiser Health News looks at what might be done to address loneliness in older adults, and the need to recognise that different groups will require different solutions.
In order to be strategic about efforts to help people it’s necessary to know how often people are lonely, what types of loneliness they experience (loneliness is not always bad), and the root causes (physical eg hearing; social eg loss of family; and psychological eg depression) of loneliness.
Dental and oral health
Maybe my optimism is getting the better of me, but it’s good to see at least some people have put dental and oral health on the agenda for the upcoming elections. Here’s why I think it’s time it was an election issue.
The Greens have unveiled a commitment to invest $5.8 billion in Medicare-funded dental care. This “policy initiative” is short on detail, but it sets the tone for the debate. The federal Australian Dental Association has responded to the Greens’ policy by reaffirming that access to dental service for vulnerable Australians must be an election priority and that it supported such policies.
A more detailed and realistic set of proposals was released this week from the Grattan Institute.
Filling the gap: a universal dental care scheme for Australia makes the case that the Commonwealth should expand its role and establish a universal dental scheme paralleling Medicare. The universal scheme should cover primary care dental services, including preventive dental care, fixing cavities and gum disease, and undertaking extractions.
The driver for the report is that it makes no sense to isolate the mouth from the rest of the body, and that “Just like with medical care, we need universal insurance for dental care … and to start, we should focus on those in the greatest need.”
This report is much more far reaching than my own proposals for reforming dental care which are modest and pragmatic. But if a billion-dollar proposal for universal dental care makes you nervous (one might ask why; does a billion-dollar proposal for cancer also make you nervous?), then my paper offers a place to start – because start we must.
As an aside: I’m starting to think we should always talk about oral health rather than dental health – it has a wider connotation and I think could help the full range of healthcare professionals see that this is part of their task in healthcare.
Two things to worry about as we move forward – in small steps or great strides: data and workforce.
An article on the Pearls and Irritations blog from my colleagues at the University of Sydney Dental School alerts us to how far behind we are in measuring outcome measures for oral health.
Four years into the National Oral Health Plan 2015 – 2024, we are still trying to figure out what to measure. We lack contemporary and comprehensive information about dental disease, patterns of dental attendance and attitudes towards dental treatment. Sadly, we know more about the barriers to accessing dental care than we do about the benefits (including cost benefits) of such care.
And in yet another example of how hard it is to make even small changes, the NSW branch of the Australian Dental Association has spoken out against the proposal from the NSW Coalition Government to fund dental treatment in mobile vans (operated by NSW Health) for schoolchildren, saying it is not “best practice”.
That may be the case (evidence anyone?) but not-quite best practice dental care is surely better than no dental care.
Croakey thanks and acknowledges Dr Lesley Russell for providing this column as a probono service to our readers. You can follow her on Twitter at @LRussellWolpe.
Previous editions of The Health Wrap can be read here.
