Confused by what “Defund the Police” means or what the Health Security Act is? We provide analysis of the flawed KNG study of the HSA and links to pieces & video describing what Defund Police could mean, plus link to Zoominar tonight on “What is Defund Police?”
COVID has exposed the US healthcare system as deeply flawed, as millions of Americans lose their employer-based health insurance and existing plans fail to cover exorbitant costs for COVID care and coverage. It doesn’t have to be this way. For almost two decades NM healthcare activists have been advocating for Health Security in NM. It is a complex topic, but two prior studies have show the Health Security Act (HSA) to be financially feasible and that was before NM vastly increased its Medicaid program and before passage of the Affordable Care Act, both of which significantly improve the financial viability of the HSA.
So, how can a new study conducted by KNG Health Consulting draw this stunning conclusion: Over the first five years of its existence, the HSA would save NM over $16B and then still conclude that it is not affordable? Today, we attempt to answer that question (below) and also invite you to our next Zoominar where we will host NM’s foremost healthcare experts in the “Zoom Room” to lay out the issues and answer your questions. Read on!
Tuesday, July 7, 6:30-8 pm, Health Security Act in NM, A Dream That Could Become Reality in 2021 with leadership from the Health Security for New Mexico Campaign. We we will be joined by Mary Feldblum, the Executive Director of Health Security for New Mexicans Campaign. Mary has been the force behind the HSA since 1992, so Mary is the definition of commitment and tenacity. She won’t give up til we get there. Joining her on the panel will be Tyler Taylor, a Los Alamos physician and member of the Campaign’s Executive Committee. Also on the panel will be Shelley Mann-Lev, a Board Member for the NM Public Health Association and chair of its policy committee. And also don’t miss our radio interview with Mary Feldblum, Saturday July 4 at 8:30 am.
Defund Police: What Is It? Why Is It Necessary?
Defund the Police is an initiative, like the Green New Deal, that means different things to different people. In some communities, it means exactly what it says, defund police departments either entirely, or almost entirely. Advocates for this approach assert that nothing has worked to curb police violence and that the reason is that the wrong kind of people, with the wrong kind of expertise and backgrounds are sent into the community to respond to crises that they are too often ill-prepared to address effectively. With police training and culture too focused on the use of force and controlling a situation, the results repeat themselves decade after decade.
If you want to read more about the various approaches suggested by the term “Defund Police” we provide two articles from two sources and a five-minute Youtube video, plus a link to a zoom panel discussion occurring this evening..
- CNN: “There’s a growing call to defund the police. Here’s what it means.” This piece describes more of what defund police could be with a focus on what is being proposed in Minneapolis. It also describes the roots of police departments as evolving first from slave patrols and then to patrols to enforce Jim Crow laws.
- The Guardian: “What Does Defund the Police Really Mean? The Rallying Cry Sweeping the US.” This piece goes into how lawmakers across the US are already responding to the call to defund police with significant changes in police funding and policies, as well as describing what defund police can mean and what activists advancing the concept are seeking. A good concise piece.
Both of the written pieces offer the views of criminal justice “experts” and lawmakers and while the video is delivered from the perspective of those impacted by police violence, it is only 5 minutes in length, so, if you want to hear from a different kind of “expert,” the zoom panel tonight should prove a different and deeper perspective.
YUCCA and Walk The Talk-Santa Fe: Why Defund Police In NM
First in the series is “Why Defund Police New Mexico” – a Zoom Webinar/Facebook Live panel discussion and Q&A (Zoom information below). YUCCA and Walk the Talk have assembled experts coming from a very different perspective than found in most online publications: representatives from communities that disproportionately experience police violence. This should be a most interesting panel. TONIGHT: Thursday, JULY 2 FROM 6:00-7:30 PM.
Black Lives Matter advocates have asked that everyone wear all black on July 4. So, if you venture out on Saturday, show solidarity and wear only black.
Deeply Flawed Independent Study Critiqued by HSA Leadership
In 1993, State Representatives Max Coll and Lucky Varela introduced New Mexicare, legislation that would have enabled New Mexico to create its own health plan covering all residents. Since that time, Dr. Mary Feldblum, who is currently the executive director of the Health Security for New Mexicans Campaign, has collected and researched almost all publicly available studies that have produced cost analyses of national and state plans for universal coverage. In other words, she understands health policy and financing quite well.
Since 1993, different versions of the Health Security Act have been introduced in the Roundhouse, always to be stalled in some committee as legislators were fearful of any large systemic change. And lobbyists were all too willing to fan those fears with misinformation developed by their expensive “think tanks,” another cost we pay for through our insurance premiums.
In 2019, the legislature passed a memorial to fund an independent study of the HSA and the Legislative Finance Committee (LFC) selected KNG Health Consulting to conduct the study. On May 22, KNG issued a preliminary report initial and let’s just say there are some very large problems with their projections, their assumptions, and to be candid with the care with which the report was prepared. Three billion dollar errors are no small matter, but the lack of consistent transparent methods has also resulted in a deeply flawed report.
Keep in mind that Mathematica in 2007 and Lewin in 1994 each reviewed the HSA and found that the HSA would cover most all New Mexicans and save the state money. So KNG is not the first or only independent study of HSA conducted.
So, leadership at Health Security for New Mexicans Campaign expected another validation of the efficacy and financial viability of the HSA from KNG. When they saw the PREIMINARY report, they immediately voiced concerns and on May June 9, they issued a 30-page analysis of the KNG report.
Most of this post is excerpted from Feldblum’s excellent work in responding to the KNG report. Those with a deep understanding of healthcare financing, may want to bypass Retake’s summary and go straight to the sources, but for most of us, the view from 20,000 feet will be more digestible. At the end of the post are links to the two previous studies conducted on the HSA, the KNG study and the full response to the KNG study from Dr. Mary Feldblum.
The Health Security for New Mexicans Campaign (Campaign) has identified numerous errors, and omissions, and in three critical shortcomings in KNG’s report. The three shortcomings relate directly to KNG’s finding that there would be insufficient funding to fully pay for the Health Security Plan during the first five years. The three critical flaws are:
- A $3 Billion Discrepancy in Preliminary Report;\
- The Preliminary Report Ignores That Health Security Plan Costs Less Than Current System; and
- The Preliminary Report Does Not Justify Revenue Projections.
First flaw: $3 Billion Discrepancy in Preliminary Report
In relation to the first flaw, Dr. Feldblum found the following:
“One of the most important objectives for the analysis was to determine the cost of the Health Security Plan (HSP). However, there is a critical $3 billion discrepancy in the report in this regard.
The discrepancy arises from two tables that indicate vastly different amounts for total health care spending on benefits and administration under the Health Security Plan. One table says the cost of the HSP for 2024 is $12.317 billion, while the other states that it is $9.259 billion. The accompanying text provides no explanation for this discrepancy, which amounts to up to one third of the projected cost of the program.
The KNG report needs to provide a clear picture of the estimated cost of the HSP during each of the five years covered in the report. This cost information is necessary for two reasons: (1) to compare the cost of the HSP with projected revenues to ensure that the HSP is affordable, and (2) to compare the costs of the HSP with the costs of the existing system, to see how much is saved with the HSP reform and to compare the affordability of the two systems.”“Comments Regarding KNG Health Consulting Fiscal Analysis of the NM Health Security Act Preliminary Report” by Dr. Mary Feldblum
The table below was developed by Dr. Feldblum using numbers from tables appearing in the KNG report.
Note that in the second column from the left, KNG estimates costs of over $65 billion over five years, while in the next column KNG projects costs of less than $50 billion. These numbers are drawn from two charts from the KNG report that appear just four pages apart on pages 47 and 51, yet KNG fails to explain how these numbers were derived or why they differ.
And herein lies another serious flaw to the report. From Dr. Feldblum:
“It is disturbing, to say that least, that in every case in which there is a possibility for HSP cost reductions (provider administration savings, global budgets for hospitals, bulk purchasing of pharmaceutical drugs, billing simplification), reductions do not seem to be considered as a possible scenario when producing the cost estimates for related services under the HSP, such as drug costs or the cost of physician visits.“Comments Regarding KNG Health Consulting Fiscal Analysis of the NM Health Security Act Preliminary Report” by Dr. Mary Feldblum
We actually do not know how KNG arrives at the estimates for different services in Table 5.2.”
Second Flaw: Preliminary Report Ignores That Health Security Plan Costs Less Than Current System
In relation to the second flaw, Dr. Feldblum wrote:
“KNG projects that the current system will cost $12.113 billion in 2024, while the HSP will cost $9.258 billion. In the first year alone, the difference between the current system and the HSP is $2.854 billion. Over the course of the first five years, the HSP saves over $16 billion compared to the current system. This confirms what two other studies have concluded: the Health Security Plan costs less than the current system.
How is it possible that the HSP costs less but is not affordable? This calls into question KNG’s assumptions, methodology, and conclusions.“
“Comments Regarding KNG Health Consulting Fiscal Analysis of the NM Health Security Act Preliminary Report” by Dr. Mary Feldblum“Comments Regarding KNG Health Consulting Fiscal Analysis of the NM Health Security Act Preliminary Report” by Dr. Mary Feldblum
The table below, developed by Dr. Feldblum, utilizes KNG cost and revenue estimates to illustrate how the HSA would save New Mexicans $16B over a five year period.
It is astounding that a health research firm could present data that illustrates pretty compellingly that HSA costs will be significantly lower than continuing with the current system and then somehow conclude that New Mexico can not afford the HSA. The truth is that it can not afford the current system and we should not be dissuaded from launching the HSA by flawed KNG analysis.
Third Flaw: Preliminary Report Does Not Justify Revenue Projections.
In relation to the third flaw, Dr. Feldblum noted:
“The preliminary report alleges that the Health Security Plan, according to KNG’s microsimulation modeling and assumptions, would end up with a “funding shortfall of approximately $7 billion over the first five years of the program (figure 5.7).
However, the alleged shortfall depends not only on the cost of the HSP (for which we have been given two different figures), but also on KNG’s revenue projections. We found both erroneous assumptions and lack of data and explanations in their revenue calculations. They do not demonstrate that they are able to verify the claims that they make.
For starters, the report needs to provide a list of all state and federal programs that provide existing funds that can be used to pay for the costs of the HSP, and the projected amounts for each funding stream. It does not. (Tyler Taylor, MD, identified $6.8 billion more than the report in federal funding for the HSP during the first five years.)
There are also serious problems with other calculations of revenue, including employer contributions to the HSP and enrollee premiums. In sum, there is insufficient information to judge the validity of the estimates they project to pay for the HSP on page 51. This calls into serious question their claim that there is a $7 billion shortfall.”“Comments Regarding KNG Health Consulting Fiscal Analysis of the NM Health Security Act Preliminary Report” by Dr. Mary Feldblu
For 20 years of my career, I led a consulting firm that worked with 4 county health departments in the Bay Area and I have reviewed dozens of think tank studies on healthcare costs and the fiscal impact of differing healthcare reforms. It is complicated stuff, no doubt and the quality of reports I’ve read, often funded with millions of dollars, have varied enormously.
While I did not read every word of the KNG report, I reviewed it pretty closely, relying on Dr. Feldblum’s response to help me over some rough patches. I found serious shortfalls in the KNG report, as did Dr. Feldblum. Nowhere can be found a list of assumptions about how costs and revenues were calculated, you just get totals. Nowhere do you see comparisons between different models. While occasionally you find references to other studies, all too often they are old and in reference to other states vastly different from NM. And the implications of those important differences are never discussed.
But I leave you with this. As the bar graph above demonstrates, for all its flawed methodology, KNG acknowledges that the HSA would save NM over $3B per year when compared with continuing to operate under the current health care system, and yet concludes that we still can’t afford it.
If a financial advisor came to you and said, “You are currently paying $10,000 a year for your insurance, but if you switch to XYZ plan you can save $3000 a year. Too bad you can’t afford it.” How long would it take you to show them to the door?
NM has been debating the Health Security Act for almost 20 years. The HSA has been studied competently and comprehensively twice before with findings indicating expanded access to care and reduced costs. It would be a tragedy to have finally effected the political change necessary to implement the plan only to have it undermined by a deeply flawed study.
For those who want to do a deep dive into reports from KNG, Lewin and Mathematica, links are provided below.
In solidarity and hope,
Paul & Roxanne
KNG FISCAL ANALYSIS OF THE HEALTH SECURITY PLAN (IN PROGRESS)
In early 2019, the New Mexico Legislature set aside funding to undertake a fiscal analysis of the Health Security Plan. The Legislative Finance Committee has contracted with KNG Health Consulting, LLC, to complete the analysis, and a final report is expected in summer 2020. KNG has set up a webpage to keep the public informed.
On May 22, 2020, KNG posted its preliminary report for comment.
While the report does point out that the Health Security Plan will ensure that almost all New Mexicans have coverage and will reduce costs, Health Security for New Mexicans have serious concerns about the report’s technical integrity.
Prior Studies of the HSA
MATHEMATICA HEALTH REFORM COMPARISON STUDY (2007)
In fall 2006, Governor Bill Richardson’s Health Coverage for New Mexicans Committee commissioned a study of three health care reform models. Two of the models were based on the private insurance system, and the third was based on the Health Security Plan. The study, performed by Mathematica Policy Research, Inc., concluded that only the Health Security Plan would save money. The other proposals all cost more than the current system even when projections were made over a five-year period.
LEWIN HEALTH REFORM COMPARISON STUDY (1994)
The Lewin-VHI, Inc., study of 1994, which focused on New Mexico, found that covering all or most residents of a state under one health risk pool would result in hundreds of millions of dollars, if not billions of dollars, in savings over time. Numerous other studies from around the country have concluded the same thing.