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The budget passed in July of last year cut Medicaid funding by about $1 trillion over ten years. Large numbers can be abstract, but KFF Health News reported on how the looming cuts (along with shortfalls in state budgets) are affecting behavioral health therapists. In North Carolina, for example, therapists treating autism expect a 10% rate cut, while in Nebraska, the anticipated rate cuts might be more than 30%. Funding for autistic patients can also limit the covered number of hours of treatment in a week. The article profiled some very real concerns from families. Interestingly, leadership of one organization of behavioral health therapists seemed to think that the rate cuts were appropriate. The CEO of that organization believes that the treatment plan should vary more widely, based on patient needs.

From a policy perspective, the right level of reimbursement can be difficult to figure out. Setting the rate too high can lead to inefficiencies and diminishing gains, and setting the rate too low can leave problems untreated (potentially incurring higher longer-term costs). What makes this decision especially difficult is that the professionals who are likely in the best position to assess the efficacy of treatments are the therapists themselves, creating a conflict of interest. Nevertheless, when patients who need treatment are unable to get treatment, supply is likely too low, meaning that the reimbursement rate is inadequate.

We hope last year ended well for you all, and that this year will be even better.

Happy New Year!

We wish you a joyous season of glad tidings.

Merry Christmas!

The previous presidential administration mandated that credit agencies could not include medical debt on consumer credit reports. KFF Health News reports, however, that the current administration "chose not to defend" such regulations. Furthermore, the Consumer Financial Protection Bureau under the current administration has "said that states do not have the authority to regulate consumer credit reports." Some states have passed legislation in the spirit of the earlier regulation, even though the legality of such legislation is being considered.

Given the vagaries of healthcare pricing and various seemingly arbitrary denials from insurance companies, protection from medical debt seems like it would garner much sympathy from the public. If enough people are affected, perhaps there will be momentum to codify such protections into federal law, similar to the legislation against surprise medical bills.

Some policy analysts previously suggested high-deductible health insurance plans, where, in exchange for lower monthly premiums, patients would end up paying more when medical care becomes necessary. On one level, these plans are an incentive for patients to get healthy and stay healthy -- by not requiring less medical care, those patients can pocket the savings from the reduced insurance premiums. Another aspect of this idea is that patients with these plans will have a strong incentive to shop for care. If enough patients exercised choice,, the providers would feel pressure to provide higher quality and/or lower cost care. KFF Health News reported on some drawbacks of these high-deductible plans.

One problem with these plans is that medical care can be very expensive: "The average price of a knee replacement, for example, increased 74% from 2003 to 2016, more than double the rate of overall inflation." If the cost of a single procedure exceeds the out-of-pocket maximum, then patients lose the incentives to shop for lower-quality care because insurances are generally responsible for paying for costs in excess of the out-of-pocket maximum.

Another problem is the lack of patient choice: "Although these plans are supposed to encourage patients to shop around for medical care to find the lowest prices, Monroe found this impractical when she had a complex pregnancy and heart troubles." When faced with a potentially life-threatening condition, patients will frequently take the option that is perceived to be the safest (for example, a well-known large hospital system in the area). Asking those patients to select a different provider to save on costs seems unlikely to succeed, and probably rightly so.

Additionally, "Researchers at the nonprofit Health Care Cost Institute, for example, estimated that just 7% of total health care spending for Americans with job-based coverage was for services that realistically could be shopped for." The cited paper indicates that in 2011, 43% of money spent on health care that was examined by the study was considered shoppable, while 15% of spending in the same year was paid by consumers. The paper points out that the intersection of shoppable services that are paid by the patients is actually quite small (7%).

High-deductible health insurance plans can be a good fit for generally healthy patients. However, these plans appear to fall short of their intended policy goals.