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The Vanishing Goal Posts Of The Affordable Care Act

I was surprised when Neil Cavuto announced on Thursday night on Fox Business(FBN) that the 7.1 million enrollee figure the White House was celebrating was celebrating was off. How much off were the numbers? Here is what FBN said.

Try about a million enrollees.

Not a million fewer enrollees. A million net new, paying enrollees.

Yes, we crunched the data, separated out as best we could those who already had insurance, so weren’t exactly “new” to getting insurance. Then, with the help of an expert, separated from the remaining group those actually paying for the coverage.

And lo and behold we arrived at that slightly more than 1 million paying ObamaCare customers.

Now, the White House fumed that we were leaving out the millions signing up for Medicaid and kids staying on their parents’ policies longer, thanks to ObamaCare. Fair enough, we told them, which is also why we excluded the millions more Americans who lost their health care coverage altogether.

As a numbers guy I was surprised. Obviously they were not getting the numbers from the Administration so I started looking for details how they came up with their number and what is so important with the 7 million number?

My best guess is that the 7 million number was an arbitrary goal set up by the Administration last year that they thought would indicate an approximate health of the Affordable Care Act(ACA) process and in particular the viability of the exchanges. I don’t think anyone put much thought into the 7 million number. It has always been more of a political goal rather than an operational goal. Considering the ambiguous nature of this number I do not have a problem with the Administration celebrating this achievement since they have so few accomplishments to celebrate. Achieving this goal is something you celebrate at Happy Hour while reminding yourself that the blind pursuit of political goals breeds incompetence. If you really want the ACA to work, you have to throw your political hat into the closet and put on your manager hat . It is time to start managing for success and the road to success starts with effective goal management. If we recognize that the people who signed up for Medicaid is a separate and distinct issue from the issues affecting the viability of the exchange then we can see why FBN  focused on the new, paying enrollees who were previously uninsured. There lies the difference. FBN has the manger hat on and the Administration still has the political hat on and the goal posts have vanished. Obviously the number of new, paying enrollees who were previously uninsured is probably a more important to the health of the individual health insurance market than the Administration’s number of enrollees. It was hoped that the demographics of the new enrollees  would be dominated by healthy millennials to assure the viability of the market. Although it will probably take several months before we get a report on the demographics, Fox and others can and should start making initial assessments based on the information that is available. If FBN’s report of a about a million new, paying enrollees is correct then we probably have too few new people in the market regardless of the demographics. If exchanges are going down a path that looks like a lot like a slow motion death spiral, maybe it is a good time to start looking at a different way to pay for pre-exisiting conditions before it actually becomes a death spiral.

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Greg Gutfeld’s #NOTCOOL Tour

IMG_4456Greg was in Cincinnati promoting his new book, Not Cool: The Hipster Elite and Their War on You . He is perhaps best known as the host of the Fox News Channel program "Red Eye" With Greg Gutfeld.  Airing at 3 a.m. ET Tuesday through Saturday, that is way beyond our bed time. My wife and I know him primarily as one of the cohosts of The Five, a weekday program at 5 p.m. ET. Although I appreciate the opinions of everyone on "The Five", my ears perk up when he speaks. Like P. J. O’Rourke he always has interesting twist on the subject.

Saturday was a great day to be in Cincinnati. It was sunny and dry with temperatures in the 50s. Although it is not shorts weather for me, I saw some young men playing basketball in their shorts on a court near the freeway. The bookstore sponsoring the book signing, The Booksellers, was packed. Fountain Square and the sidewalks around the store were packed. It seems everyone wanted to get outside after a long winter. We had a great time and Greg was both witty and gracious.

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Brothy, Garlicky Beans ala Food52

BrothyGarlickyBeansThis recipe for Brothy, Garlicky Beans comes courtesy of Food52. One of our favorite week day meals is roasting a whole chicken over a bed of vegetables. Typically we have the legs, thighs, and back left over from the meal so we freeze the leftovers. Last Saturday I combined the chicken with vegetable scraps I collected during the week and simmered these ingredients for about six hours. I tasted it during the day and I may have added a few fresh vegetables to balance the flavor. Voilà , I have four cups of excellent chicken stock looking for an idea. Thursday is our soup/light meal day. Before I went to work I put 1 pound of white beans into a pot and covered it with an inch of water. When I got home I drained the beans and started the soup recipe. Since I had some very fine Andouille sausage in the refrigerator I sliced up two links and added it in the last ten minutes to add a little pizazz. I combined the soup with a few slices of toasted French bread and we had excellent comfort food for a rainy day!

Brothy, Garlicky Beans

Serves 6

1 pound white beans, rinsed and drained
3 cups chicken stock (homemade or low sodium)
2 medium shallots, halved and peeled
4 fat cloves garlic, peeled and smashed
1 stalk of celery, preferably with its leaves, cut into 3-inch lengths
1 large carrot, peeled and halved
2 scallions or spring onions
1 sprig thyme
1 sprig rosemary
2 tablespoons good olive oil, plus more for serving
Sea salt
Parmesan rind (optional but recommended)
1 cup canned chopped tomatoes
Grated Parmesan for serving

  1. Put the beans in a large heavy pot and cover them by about an inch with cold water. Bring the water to a boil over high heat. Let the beans boil for one minute, then remove them from the heat and cover the pot. Set aside for one hour.
  2. Drain the beans and return them to the pot. Add the chicken stock, and if the beans aren’t quite covered in liquid, add a little bit of water. Add the shallots, garlic, celery, carrot, scallions, thyme, rosemary, Parmesan rind, olive oil and a teaspoon of salt. Bring to a boil, then lower the heat until the beans are just simmering. Cook uncovered for about 40 minutes, until the beans are almost tender. Add the tomatoes and cook gently for another 10 to 20 minutes.
  3. Remove the aromatics and extra vegetables if you like (or save them for yourself like I do), taste and add more salt if necessary. Serve drizzled with a little olive oil and a shower of Parmesan.
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The HealthCare.gov Mistakes

Now that the enrollment period is closed it is probably a good time to start looking back at the mistakes made. Since HealthCare.gov is attempting to act like a private business it is fair to use compare their practices to those of existing businesses. As a prospective customer and IT guy I have to say I was dismayed on many different levels. Here are some of my complaints.

  1. Better Project Planning and Execution
    1. The website planning, execution, and testing was a total disaster. It took me a couple of weeks before the front end was fixed enough to allow me to log in.
    2. They should have finished testing the easy part, the front end, at least 90 days prior to the roll out. I first used www.healthcare.gov in 2010. There is nothing new or novel about the front end. There was no excuse for the front end not to be ready on October 1st.
    3. The application process was unnecessarily complicated. They should have copied the code and work flow where appropriate from some else’s web site such as www.ehealthinsurance.com or www.anthem.com.
    4. Maybe they should have delegated income verification to the insurance companies.
    5. The site and back end specifications should have been locked down 90 to 180 days in advance of the roll out.
    6. The backend should have been tested by the time the web site went online.
    7. Management reports should have been available on October 1st.
    8. They should have enlisted www.ehealthinsurance.com and the others to sell subsidized health insurance on October 1st for redundancy.
  2. Better Customer Marketing
    1. They should have been honest about the benefits and drawbacks of the new health insurance plans compared to the old plans.
      1. They should have enlisted someone to do a non-partisan price and product comparison with last year’s insurance products. Most of the comparisons I read sounded more like political propaganda rather than Consumer Reports. I ended doing my own comparison and as a result was not happy. Now they are stuck trying to sell to a customer who is not happy and doesn’t trust you. Good luck with that strategy!
      2. They should have used a proactive approach towards explaining the drawbacks of narrow market insurance plans and how it affects doctor choice. This should not have been something we stumble upon after the web site is up and running.
      3. We should have been talking about high or increased deductibles before October 1st.
      4. They should have used a “go slow” approach towards canceling existing heath insurance plans. If they are willing to grandfather my current health insurance plan for another two years, they should have said this in October 2013.
    2. The website should have proudly demonstrated how HealthCare.gov respects the customer’s privacy and security concerns. The HealthCare.gov did almost nothing to alleviate customer security concerns. It was as if they did not care.
    3. The Administration’s marketing plan was questionable at best.
      1. It is very hard to build customer interest and satisfaction with the Affordable Care Act when a significantly large group of people are mad that they are being ripped off. You have to wonder about marketing strategy when an integral part of the plan appears to be to ignore those customers.
      2. I will reserve my judgment on the success of the Between the Ferns and other youth oriented marketing until we see how many young customers are still paying their health insurance premium six months down the road.
      3. Over the last 11 days I received at least eight emails very similar to the email above but with different subject lines. Since my existing health insurance is grandfathered I chose to ignore the emails but the tone sounded more like nagging rather than trying to be helpful. Sending nagging emails once a day was not helpful and I suspect that some people clicked the spam button to get rid of them. As a person familiar with email marketing this is a major faux pas.
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The Fate Of Employer Sponsored Health Insurance, Hobby Lobby Versus Kaiserification

Earlier this week in the Fiscal Times article, Hospitals Plot the End of Insurance Companies, they described the “Kaiserification” of our health care system. Today I caught up with Michael McConnell’s answer to whether Hobby Lobby could avoid a substantial burden on its religious exercise by dropping health insurance and paying fines of $2,000 per employee? Here is what the Fiscal Times said about the Kaiserification of our health care system.

Dr. Ezekiel Emanuel, chairman of the Department of Medical Ethics and Health Policy at the University of Pennsylvania and one of the architects of the Affordable Care Act, agreed, saying that we’re beginning to see what he called the “Kaiserification” of our health care system.

He was referring to the Kaiser Permanente health care consortium, which combines a health insurance company with subsidiary hospitals and medical practices to create a fully integrated health care delivery system. He noted that large insurer Wellpoint recently completed the acquisition of a health care company in California, apparently with an eye toward replicating the Kaiser model in some form.

Emanuel said we’re witnessing “the end of insurance companies as we know them” and that if they want to survive, they “will have to get into the business of providing care.”

He predicted that in the world of health care, “the wave of the future is integrated delivery systems ”“ integrating insurance with delivery function.”

I agree with Dr. Emanuel on this point. I argued in the past that a local health care plan would be best for me and wondered out loud why we are using a federal solution to an inherently local solution. Here is what I said in my post, Health Care Reform for the Forgotten Man.

My perfect health care plan is an individualized health care plan issued from my local hospital that includes my local doctor. The perfect plan for the business I work at is a defined contribution plan. If we combine both of these together we arrive at the conclusion that if health care is to evolve to a more perfect system then it will be primarily a local solution with possibly some state-wide or regional features.

As much as I like the “Kaiserification” solution there are a few problems with it for both local and nationwide companies like Hobby Lobby.

  1. How do you create and maintain adequate cost and quality competition in a region? Hospitals seem to be clueless about cost and quality control. Are health insurance companies a necessary evil till hospitals, government plans, and insurance companies can settle on one price for a service?
  2. How do you compensate doctors and hospitals in other states if the patient wants to use them? My nephew had a chronic problem that was not resolved until he went to a doctor in a different state who specialized in the diagnosis and correction of that problem. His surgery was out of network. A similar but different problem exists for people living in a tri-state area. I can get to a highly rated hospital in Kentucky faster than I can get to one in downtown Cincinnati.
  3. How do you manage health insurance benefits for a company with employees working nationwide? Hobby Lobby has about 561 stores and 21,000 employees.
  4. How important is the health insurance benefit to attracting and keeping employees?
  5. How disruptive would it be for a company to drop its health insurance benefit?

As Mr. McConnell pointed out the last two questions are important reasons for why Hobby Lobby, Walmart, Starbucks, and others will continue to offer a more attractive health insurance benefit to their employees than is offered via the exchange. Once again the conservative, go slow approach to reforming employer sponsored health insurance benefit continues to be more attractive to both employers and employees rather than the progressive, faster, less understood changes of the Affordable Care Act. The $2,000 penalty and “Kaiserification” of health care may be an appealing tradeoff for small companies with health care plans very similar to exchange plans. For large group plans the “Kaiserification” of health care is a confusing message to the existing employees and is becoming an unforeseen obstacle in hiring new employees. For large companies like Hobby Lobby their ability to hire directly affects their ability to grow. Justifiably these companies are proud of their existing health care plans and are probably getting upset that their existing and prospective employees are wondering who is telling the truth about health care. These are the people who were supposed to be able to keep their health care plans and be excluded from health care chaos! Unfortunately Dr. Emanuel’s talk of companies dropping health insurance as a good thing is just adding to the skepticism towards the Affordable Care Act. If there was any remaining good will in the public towards the Affordable Care Act, the polling says it is quickly fading. The obvious solution to the religious objection question is to allow the exchange to create a “Medicare Advantage-like” solution and let these large companies get back on track with the “go slow” approach to health care reform. Abortion benefits was not one of the big problems the Affordable Care Act was trying to fix. This would allow Hobby Lobby to offer a plan that complies with their religious beliefs and the government to offer a plan that complies with their religious beliefs. The solution is not pretty but does it matter when 27 parts of the ACA are postponed? As some point the judicial branch is going to get tired trying to fix the Affordable Care Act.

Once again I am reminded me of this old nursery rhyme.

Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall.
All the king’s horses and all the king’s men
Couldn’t put Humpty together again.[1]

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Former Qwest CEO Joe Nacchio Tells Story of Fight Against NSA, SEC

My wife was adamant that I listen to this interview between Maria Bartiromo of Fox Business and former Qwest CEO, Joe Nacchio. She thought it was the most explosive story about the NSA this year. She is right and I think the NSA should be worried. Mr. Nacchio looks like he is getting his ducks in a row to publish a book that will question the practices of the NSA for over a decade. This has to be a very inconvenient time for a book about alleged illegal NSA practices. In the interview I think that he made three good arguments.

  1. The NSA started illegal surveillance of American citizens prior to 2001.
  2. The NSA engaged in a war against Qwest that was not wise and definitely sounds like it was not in the best interest of the American people or the intelligence gathering effort.
  3. As a result of this war between Qwest and the NSA, he did not get a fair trial and was unduly punished for a crime he did not commit.

This is not a new story. The first reference I found on the Internet to this story is a Electronic Frontier Foundation article in 2007, Qwest CEO: NSA Punished Qwest for Refusing to Participate in Illegal Surveillance–Pre-9/11! An interesting comment made by Mr. Nacchio had to be the one he made about retroactive telephone company immunity legislation in 2007. Here is a quote from Wikipedia on the Foreign Intelligence Surveillance Act(FISA) history.

At the same time, the Senate Intelligence Committee reportedly reached a compromise with the White House on a different proposal that would give telephone carriers legal immunity for any role they played in the National Security Agency’s domestic eavesdropping program approved by President Bush after the Sep 11 terrorist attacks.

I am guessing but this looks like the telephone companies thought their activities prior to 2007 were probably illegal and they wanted a get out of jail free card from the government. They were probably afraid of getting the Nacchio treatment. This looks like a lousy way to run an intelligence operation. I doubt the NSA had the hearts and souls of the telephone companies on their side when the telephone companies’ most important issue appears to be retroactive immunity. It implies a degree of incompetence or corruption in the NSA. So now we get to the big question, how do we reform the NSA? If a good NSA exists and how do we get there? Edward Snowden has his ideas on how to accomplish this. I have a different idea. As a former Qwest stock holder I have to wonder whether my losses were because of bad luck or illegal activities by the NSA. Here is a strange thought. If Mr. Nacchio is successful in his argument that he failed to get a fair trial because of retribution by the NSA then how long do you think it will take before some aspiring lawyer files a class action suit against the NSA for Qwest stock market losses caused by the NSA vendetta. I suspect the NSA will be more willing to look at reform as we get closer to the Presidential election and it looks like the public flogging will go on forever. Of course, that would require that the NSA turn over a new leaf and negotiate in good faith. Good luck with that!


Former Qwest CEO Joe Nacchio Tells Story of Fight Against NSA, SEC

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To Fix Or Not To Fix, The Affordable Care Act Question Of The Year

Rick Caird had this to say about the Affordable Care Act over at Althouse …

We need a like button. I liked Mead’s comment of “… all I got was this lousy insurance requirement”.

We shouldn’t forget that ObamaCare was written in the dead of night by Harry Reid’s office, voted on, unread, by the Senate hours later and sent to the House which passed it “as is” so it would not have to go back to the Senate where Scott Brown’s vote would have killed it.

Therefore, there was no internal consistency check. There was no opportunity for clarifying amendments. There was no opportunity for anything Harry Reid did not think was appropriate. That is why we keep finding these unintended consequences that Obama tries to paper over with Executive Orders.

That is why the idea of “fixing” ObamaCare is a very bad idea. There are so many traps in the bill (as well as in the stacks of “rules”) that no one could untangle the mess. This is just like a badly designed web site. Best to start all over than try to add undocumented patch upon undocumented patch in a vain attempt to fix it.

If the Republicans get control of the Senate, they should identify what the minimum requirements of a health care system should be, and create a much simpler, easy to understand bill and send that to Obama.

As a fan of the KISS principle I agree with his fix for our health care system although I am very skeptical that the right political environment will exist in 2015 or 2016. The unsubsidized health insurance price increase for healthy people is a problem that is just not going to get solved without major changes to the Affordable Care Act. It is a sign of insanity when Affordable Care Act supporters chase away the best customers and expect our health care system will become sustainable.

For kicks I went over to the Kaiser Health Subsidy Calculator again and here is what I found. I am paying $407 per month for a silverish-bronze unsubsidized, grandfathered plan with a $3,000 deductible. For the mathematically challenged that is $4,884 a year. So why does a $12,627 plan with a $6,927 subsidy make sense for a healthy person or the country? The country would be paying $6,927 more for something they got for free in 2013. I would be paying $816 more for a silver plan. The silver plans I looked at had a higher deductible, too. The winners in this environment are those folks who think the biggest problems facing health care reform will be fixed by throwing more money at it. I remain skeptical that this shell game approach to health care reform will fix anything. This leads me to the conclusion that repeated delays is the simple, popular, and successful political answer to fixing the Affordable Care Act.

2014-03-25 13_02_53-Subsidy Calculator

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Thing That Make Me Go Hmm… Reflecting On Ohio’s Economic Turnaround

I was fascinated with the Fox News interview of Governor Kasich this morning. Chris Wallace asked Governor Kasich the following question.

You have engineered quite a turnaround at Ohio since you took office in 2011 and let’s put up part of your record. Your state has been the number five job creator in the nation over that period of time. And number one in the Midwest. Unemployment is now 6.5 percent. The lowest in your state since June of 2008. And Ohio has gone from an $8 billion deficit to a $1.5 billion surplus. Question: what is the secret to your success?

The alleged job creation performance was pretty amazing considering that the last time I looked at Ohio’s job creation performance I was not impressed. So I decided to crunch the numbers. I picked up the job creation numbers from the Job Growth Update page at Arizona State University and found that Ohio’s 2011, 2012, 2013, and 2014 job growth performance was definitely middling. They were ranked number 26,18, 25, and 33.  This was less impressive than the performance of Indiana which was ranked 5, 8, 40, and 20. So how did Fox come up with the optimistic talking point?

Since the question talked about jobs created, I put the data into a spreadsheet and calculated the actual number of jobs created. In this case Ohio ranked 7th since Ohio has a larger population than most of the states. However if we use this definition of job creation than the number one job creator in the Midwest is Illinois since it has the largest population in the Midwest. Hmm…

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Why Not Delay The Affordable Care Act Forever?

If the most popular “fix” to the Affordable Care Act has been to delay it, you have to ask the question what is the end game for fixing the Affordable Care Act? Delaying the Affordable Care Act has been a simple and popular “fix” for the Administration. If the delay is successful with its targeted population in 2014 then the politics gets even stronger to continue to delay major provisions of the Affordable Care Act till a more opportune time. That opportune time does not look like it is going to be 2015 or 2016. The longer this delay goes on the more likely the voters will be more confortable that there will never be a opportune time. At some point the “Doc Fix Follies” becomes the political model for health care reform. So why should a politician attempt to “fix” the Affordable Care Act when repeated delays is the simple, popular, and successful political answer?