Sunk Cost

I find myself struggling with sunk cost these days. I preach the concept to my friends and family all the time. That decisions you made in the past, unless they have a direct bearing on future events, aren’t relevant to your decision making process. Rationally, this should reduce the guilt, or the regret, over doing the best thing there was to do at the time. Realistically, though, sunk cost decisions can impact our future, through that same guilt or regret. The choices we make in the past do provide a roadmap for the decisions we make in the future. We don’t want to feel that regret in the future, or the pain, and because of this, we create new pathways that allow us to choose better in the future. Personally, it’s hard to integrate the choices I’ve made in the past with what is happening now. I can only keep trying!


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10 things I learned reading through the PPACA

So, it’s the last day of the year, and in the spirit of the Internet, I’m going to do a “10 things I learned about the ACA” post.

10) I got really bored reading the PPACA, and the funniness quotient of my blog posts fell off dramatically. For this I apologize.

9) It doesn’t really matter what is in the PPACA to most people, they are going to make things up.

8) Taking a broad, comprehensive law such as the PPACA and turning it in to reality is very complicated.

7) People don’t like change, especially change they don’t understand.

6) People in the U.S. want to enjoy every freedom, including the freedom to be screwed over by health “insurance” plans that don’t actually cover very much of their health care.

5) It’s going to take me a looooooong time to read the whole ACA, mostly so I don’t want to gouge my own eyes out doing it.

4) The PPACA expanded the adoption child tax credit.

3) The PPACA includes a tax on tanning.

2) Congresspeople will find a way to complicate even the simplest sentence.

1) 2014 is going to be an interesting year!


In light of the fact that the ACA is essentially fully implemented, starting tomorrow, with a few hiccups and exceptions, I’m going to switch the focus of this blog back to general economics questions, although I may toss in a visit to the PPACA now and again. I am also going to follow the lead of the ineffable Angélique Jamail, and commit to a weekly post, let’s say on Wednesdays. See you next week!

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Exchanges are Open!

For those of you who don’t know – the PPACA Exchanges are open for business!

Check here to see if you qualify:
Check here to see if your premiums would go down:

Good luck!

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Health Care Quality Improvements

Ah, now we get to something very personal in the PPACA. A call for Health Care Delivery Systems Research.

Section 3501 calls for the AHRQ to conduct research in various areas of patient safety and quality improvement and gives out $20,000,000! It also provides quality improvement technical assistance grants.

Section 3502 sets up community health teams to support the patient-centered medical home. Necessary Sums!

Section 3503 provides grants and contracts to support medication management services for chronic diseases. Necessary Sums!

Section 3504 provides grants and contracts for design and implementations of regionalized systems for emergency care, including grants for emergency care research. $100,000,000!

Section 3505 provides grants for trauma care centers. $100,000,000!

Section 3506 creates a program to facilitate shared decision making. Necessary Sums!

Section 3507 calls for reports on evidence based presentation of prescription drug benefit and risk information.

Section 3508 creates a demonstration program for integrating quality improvement and patient safety training into clinical education of health professions. No money listed!

Section 3509 calls for Improving Women’s Health. I’ve got a few ideas, but they aren’t neutral. Establishes an office of Women’s Health! With Goals, and Advice. And Coordinating Committees! All paid for with necessary sums. Necessary and appropriate!

Section 3510 creates a patient navigator program with absolutely no details about it but you do get $3,500,000 a year till 2015.

Section 3511 authorizes appropriation.

Section 3512 makes a GAO study and a Report!



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The Fashion Sense of Toddlers

Professor X turned 22 months yesterday, on the 22nd. His last magic birthday until he is 22. At which time he will be taller than me, and possibly his father (but probably not his brother) and graduating college. The time will go too fast. Heaven only knows what he will be wearing then – if I knew what the fashions of 2035 would be, I could be a billionaire.

For now, though, he has developed his first fashion sense. Unlike when he is 22, his toddler self isn’t thinking about how cool he looks, or how to get a date with the cute boy or girl across the way, or impressing a future boss. No – his toddler self has two clothing loves – Vehicles and Dinos. And this outfit is a riotous combination of both.


Every day that isn’t a day where he gets to wear either Thomas or Lightning McQueen on his shirt is a sad day. And every night should be a night where dinosaurs roam the earth once more, at least as long as they are attached to him via his jammies.

It is both delightful and poignant that his personality is developing so quickly. I wouldn’t trade it for the anything, but he is past babyhood, running through toddlerhood, and will soon be a young man. And when he is 22, and moving off on his own, dressed in some natty shirt and the latest trend in jeans, I will undoubtedly shed a tear that a train on his shirt and dinos on his pants no longer fill him with the utmost joy and happiness.


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Subtitle E – Ensuring Medicare Stability

I’m desperate to finish reading this thing. I can totally understand why the Supremes didn’t want to touch it.

Section 3401 of the PPACA alters Market Baskets and incorporates Productivity Improvements. These things have to do with some complicated accounting that the government does to determine how they pay for things. Now, I’m not an account, but the gist of this section is that the government wants to pay less for higher productivity. Hey – don’t we all?!?

Section 3402 (notable for its brevity in contrast to the verbosity of the previous section) make temporary adjustments to the calculation of Part B premiums by making the income thresholds for these premiums the same as the ones in 2010 for the period 2011-2019.

Section 3403 (amended by section 10320 to change its name) sets up an Independent Medicare Advisory Payment Board. This advisory board is supposed to help reduce per capita spending by making recommendations on how to do so. It links the ideal growth of Medicare to the growth of GDP, which is interesting. It also gives a list of procedural rules on how changes to Medicare, as advised by the Board, should be implemented.


And that’s all they got for ensuring Medicare Stability. Leeches and blood-letting anyone?


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Subtitle D

Subtitle D is about Medicare Part D. Maybe they were being subtly ironic, but maybe they just didn’t notice. Who knows!

Section 3301 looks at the Medicare Coverage Gap Discount Program. This is the so called “Medicare Doughnut Hole” where after a certain point, participants were expected to pay 100% of drug costs, up to a catastrophic point. This section changes that to only 50%.

Section 3302 improves the determination of Medicare Part D’s low income benchmark premium. That’s pretty much what it does.

Section 3303 will allow a waiver of monthly premium for those people who are subsidy eligible, if the premium is de minimis, which is fancy Latin for trifling or minimal. It doesn’t actually say how much that it is though.

Section 3304 makes special rules for widows and widowers regarding eligibility for low-income assistance which basically extends the eligibility period for a year after their death.

Section 3305 improves information for subsidy eligible individuals reassigned to prescription drug plans. Specially formulary differences, and coverage determination.

Section 3306 increases funding and outreach for low-income programs.

Section 3307 improves formulary requirements for Medicare Part D, specifically requiring the inclusion of anticonvulsants, antidepressants, antineoplastic, antipsychotics, antiretroviral and immunosuppressants for treatment of transplant rejection. I wonder why there aren’t more pro-drugs. They seem so….negative.

Section 3308 reduces Part D subsidies for higher income individuals.

Section 3309 eliminates cost-sharing for dual eligible individuals (specifically here dual eligible for Medicaid and Medicare).

Section 3310 reduces wasteful dispensing of outpatient prescription
drugs in long-term care facilities. Or at least it tries to by allowing drugs to be prescribed in weekly or daily doses, rather than 30 days.

Section 3311 tries to improve Medicare prescription drug plans by creating a complaint system for problems with this plan.

Section 3312 creates uniform exceptions and appeals process for prescription drug plans including an Internet Website and a toll-free telephone number!

Section 3313 sets up another study! Of Prescription Drug plans!

Section 3314 allows for the inclusion of costs incurred by AIDS drug assistance programs and the Indian Health Service towards the annual out-of-pocket threshold.

Section 3315 was repealed and replaced. So no section 3315 for you!



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Fashion Friday

I’m doing a guest post, on my friend Angélique’s blog – Sappho’s Torque.

I moved to Seattle almost exactly 4 years ago. One of the hardest changes, in addition to leaving my friends, was getting used to the new fashion of the city. I was used to sundresses and sandals, having lived in Houston since I was 4. Seattle has those – for about 2 months between July 5th and September 5th. The rest of the year is rainy.

It’s been quite a struggle to adjust to my new surroundings – I’ve purchased leggings to wear under my beloved dresses, tried (and failed) to embrace pants, and purchased at least three pairs of waterproof boots.

But the biggest change has been embracing the hoodie. I mentioned it rains – right? And people don’t use umbrellas (the rain is almost never that heavy). So instead, they wear an assortment of waterproof gear from REI. Or, apparently, if they are born here, they just walk out in the rain like my 20 month old son. I wasn’t, hence the hoodie. And they usually wear black. Never been a big fan of black for clothes.

I saw a hoodie at REI three years ago that I just loved. It was pink, and fuzzy on the inside, and beautiful and wonderful. I had just bought a bunch of other jackets so being a good economist, we didn’t buy it then. But I thought about it. My 10 year old son, who was 7 then, said repeatedly, “Don’t think about the pink fuzzy jacket!” Months went by. I would tease him about thinking about the pink fuzzy jacket. Finally, for my birthday, I received it, my beloved pink fuzzy jacket. It’s made me feel a little bit more like me as I wander through this dark and rainy land.


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Subtitle C – Provisions relating to Part C

What a ridiculous title. They are clearly running out of steam here in the PPACA.

Ok, sorry for the delay. This document is really dull. Plus, I had other work to do. But mostly, this is dull. I really hope you appreciate the sacrifice I’m making for you all here. J

Section 3201 was repealed and replaced before it even got started. Oh boy! It relates to Medicare Advantage (MA) payments. This is a private insurance plan that provides both Medicare Part A (the hospital portion) and Part B (the doctor portion). The government pays the insurance company, which can then set the rules for out-of-pocket costs and referrals. Not everyone is eligible for these types of plans. Section 3201 adjusts the payments for it.

Section 3202 – Benefit Protection and Simplification – this specifically calls out a few benefits (such as chemotherapy, renal dialysis, ad skilled nursing) and limits the ability of plans to alter the cost-sharing for these benefits. It also adjusts the rebates for certain plans, and identifies some quality categories that adjust the percentage of rebates that a plan will receive.

Section 3203 regarding the Application of Coding Intensity During MA Payment Transition – this section adjusts some of the payment requirements of the MA plan.

Section 3204 changes the disenrollment period from MA to regular Medicare to the first 45 days of the calendar year, from whatever complicated version it was before. Since 3204 is supposed to simplify things.

Section 3205 extends certain specialized MA plans for special needs individuals. They were supposed to have transitioned by 2013, so I guess that’s done.

Section 3206 extended Reasonable Cost Contracts to January 1, 2013. I think we can all agree that Reason has fled Washington.

Section 3207 is a technical correction. The government calls a technical!

Section 3208 makes permanent the Senior Housing Facility Demonstration Project.

Section 3209 gives the DHHS the ability to deny MA plan bids.

Section 3210 creates new standards for Medigap plans. The new standards will attempt to use nominal cost sharing to encourage use of physician services.

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Accuracy! Of Payments!

Because Payment accuracy is important. Kidding aside, it is important that we pay what we owe, and not more.

Section 3131 concerns Home Health Care, including a Study! Of Important Things!

Section 3132 is about Hospice care. With more studies, to ensure accuracy.

Section 3133 is about improvements to the Medicare Disproportionate Share Hospital Payments (discussed here: Medicare Disproportionate Share). They will look at empirical data for this. WOW!

Section 3134 looks at Misvalued codes in the Physician Fee Schedule. It identifies them, and validates the correct ones. And then presumably, but not terribly explicitly, fixes that.

Section 3135 is the Modification of Equipment Utilization Factor for Advanced Imaging Services. One thing that means is that if you have an imaging session, and they look at more than one part of your body, they will be able to charge 50% less for each successive part, rather than 25% less.

Section 3136 is a Revision in the Payment for Power-Driven Wheelchairs. You guessed it – The Scooter Store! It changes the appropriate section to indicate complex, rehabilitative, rather than just any old thing. We’ll see if this impacts their ads.

Section 3137 is the Hospital Wage Index Improvement. It actually takes things like geographical location into account. Amazing!

Section 3138 discusses the Treatment of Certain Cancer Hospital. Basically Cancer is expensive, so specialty hospitals might need more money. They will look into that.

Section 3139 is about Payment for Biosimilar Biological Products. These are things like insulin, interferon, growth hormone, etc. These are made within living cells, such as bacteria, or yeast. Because of this, they cannot be exactly reproduced, like a chemical drug. Therefore, you shouldn’t always substitute, like you should be able to for any other brand name and generic drug. This section just makes this explicit, and deals with how to properly pay for these.

Section 3140 is the Medicare Hospice Concurrent Care Demonstration Project. At this point, it is over, so, yeah.

Section 3141 is entitled APPLICATION OF BUDGET NEUTRALITY ON A NATIONAL BASIS IN THE CALCULATION OF THE MEDICARE HOSPITAL WAGE INDEX FLOOR. It is a short paragraph, but it would take a whole blog itself to explain well. In short, it has to do with the way they calculate whether something is budget neutral (doesn’t raise or lower the budget), and what year’s dollars to apply. Fun stuff.

Section 3142 is about a Study! On Urban Medicare Dependent Hospitals. Remember we discussed the Rural ones here: Rural Protections

Section 3143Protecting Home Health Benefits. They are protected. Rest easy.

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