Month: February 2009

The Obama Health care Budget

Feb 28, 2009• 88

By ROBERT LASZEWSKI

Pieces of the health care portion of the Obama budget are leaking out.

Based upon published reports, the Obama “down payment on health care reform” will include:

$634 billion to help pay for health care reform over the next ten years.
$318 billion of that—about half—will come from tax increases that include reducing the mortgage and charity deduction for high income Americans.
Charging wealthier seniors more for the Medicare Part D drug benefit—as is done for Medicare Part B now.
Cutting Medicare HMO payments by $175 billion over ten years.
Reducing Medicare hospital payments by $17 billion over ten years by bundling inpatient and outpatient reimbursement to include the 30-days after discharge.
Cutting Medicare hospital payments by $8.4 billion over ten years for re-admissions resulting from substandard care.
Requiring drug makers to increase the rebates on drugs sold to Medicare patients from 15% to 21% saving $19.5 billion over ten years.

Are We Mature Enough to Make Use of Comparative Effectiveness Research?

Feb 27, 2009• 39

By ROBERT WACHTER, MD

Thanks to White House budget director Peter Orszag, a Dartmouth Atlas aficionado, $1.1 billion found its way into the stimulus piñata for “comparative effectiveness” research. Terrific, but – to paraphrase Jack Nicholson – can we handle the truth?

In other words, are we mature enough to use comparative effectiveness data to make tough decisions about what we will and won’t pay for? I worry that we’re not.

First, a bit of background. Our health care system, despite easily being the world’s most expensive, produces (by all objective measures) relatively poor quality care. Work begun 3 decades ago by Dartmouth’s Jack Wennberg and augmented more recently by Elliott Fisher has made a point sound-bitey enough for even legislators to understand: cost and quality vary markedly from region to region, variations that cannot be explained by clinical evidence and do not appear to be related to health care outcomes. In other words, plotting a 2×2 table with costs on one axis and quality on the other, we see a state-by-state Buckshot-o-Gram.

Three key conclusions flow from this “variations research”:

Lots of what we do in health care is costly and ineffective
We must somehow goose the system to move all providers and patients into the high quality, low cost quadrant on that 2×2 table; and
Better evidence about what works would help with such goose-ing.Continue reading…

For the Obama Administration Health Care Reform Will Require Tough Cost Containment

Feb 27, 2009• 26

By ROBERT LASZEWSKI

The President has made a powerful argument— America cannot get its economic house under control without comprehensive health care reform. The cost of existing entitlements – public and private —and any new ones are just too big a ball and chain on our short and long-term economic health.

The
President has also argued that there could be no better time to fix
this mess than now—when it is so critical to get our economic house in
order once and for all.

The President is right on both counts.

As any of us who have studied this issue know, the number of those uninsured in America are not really the problem—they are a symptom of health care costs
run amuck as individuals, employers, and government just can’t afford
to insure everyone. Adding more people to this unaffordable mess
without fixing it first is not an answer—it’s a prescription for even
more fiscal irresponsibility.

Novel Data Sources for Quality Improvement

Feb 27, 2009• 1

By JOHN HALAMKA

This Thursday I gave a presentation to the National Committee on
Vital and Health Statistics (NCVHS) about measuring quality using
“traditional” and emerging, novel sources of healthcare data.

My
definition of traditional data sources that are currently used to
measure quality includes administrative claims data aggregated from
hospital-based claims databses (for example, BIDMC has an Oracle
respository called Casemix), payer-based databases (all have a claims
warehouse to support disease management), physician organizations (Beth
Israel Deaconess Physicians Organization has worked with Heathcare Data Services to create all payer business intelligence tools ) and health data consortia (such as the Massachusetts Health Data Consortium offers de-identified aggregated claims to enable institutional comparisons)”

Commentology

Feb 27, 2009

Helen Darling of the National Business Group on Health wrote in to comment on the thread on Robert Laszewski's post on the realities behind the Obama health plan. ("For the Obama administration health care reform will require cost containment.")

We have known for many years that we have a wasteful health care system full of overuse, misuse and underuse. The system is not getting better and people are less healthy than ever. It is exciting and inspiring that we have political leaders who are willing to fight the tough and thankless battles that they will have to fight to get us on the right track as a nation. While there will be plenty of specifics to make everyone unhappy about one element or another, can't we all pull together to have a much better, more effective and affordable health care system for the good of the country?

In the thread on MEDecision CEO David St. Clair's post over the brewing battle over privacy in Washington "Consumers Need All the Facts in the Privacy Debate" Inchoate but Earnest writes:

"At present "healthcare privacy" is a wraith, a boogeyman, & like most boogeymen, it is foisted upon the innocent by people, by institutions, that would retain power over them. The unknown deserves respect, but rarely fear …"

Making Price Competition Work

Feb 27, 2009• 3

By ROGER COLLIER

Part 1 of this two-part piece asked why Adam Smith’s “invisible hand” seems to be affected by a palsy that causes health care price competition to fail, especially when employers and employees select health plans. This part focuses on a second failure of price competition: when insurers build their networks. Our hearts don’t often bleed for health insurers, but it’s possible to feel a little sympathy as they struggle to assemble networks of the most cost-effective providers.

The insurers’ first problem is the data used to pick their preferred providers. Few carriers or PPOs have the analytical capability or the data base of the Dartmouth Atlas Project; most will be drawing conclusions from their own more or less limited claims data, along with possibly anecdotal perceptions of quality.

The insurers’ second problem is the need to include in their networks “essential” providers, like prestigious or sole community hospitals, or major specialist groups. These key providers are well aware that insurers will not want to alienate employers—or have gaps in their networks—and will set their prices accordingly. In the early days of managed care, insurers drove down prices by negotiating with subsets of providers, offering higher patient volumes in exchange for lower prices. It worked, right up until the big provider push-back against managed care in the 1990’s, when hospital mergers and amalgamation of specialist practices created quasi-monopolies that insurers are now unable to circumvent.

I really don’t understand Wall Street, part 98

Feb 27, 2009• 7

By Matthew Holt

On the campaign trail Obama said that he would if elected cut the overpayments to Medicare Advantage plans by about $15bn a year. Once elected he confirmed that he would.

Stupid me thought that this would mean people on Wall Street would listen and that this freely available information would have been priced into the stocks. After all Bob Laszewski and I have been asking each other about this for quite some time!

So did I spend the last few weeks building up a big short position in the for-profit health insurers? No, this news was well known and already reflected in the stock price.

And when Obama’s budget came out today and essentially showed that it would cut Medicare payments by about the same amount he said he would (OK the cut proposed is $17.5 bn not $15bn but close enough). So did the stocks stay flat? Err… look at the chart

Healthplans

They’re all off 10% today alone, and Humana, one of the biggest Medicare players is off 20% today and 40% for the week! Were you short? Or were you too clever—just like me?

Musings on Integrating Care at the IOM

Feb 26, 2009• 5

By Matthew Holt

So I’m in
DC figuring out how the East coast medical policy elite tries to change the world. While the rest of DC is buzzing about Obama’s speech and budget, The Institute of Medicine is having a conference on Integrative Medicine. But most people think it should be called integrative health.

What is integrative health, you ask? Good question.

The majority of the panelists are mainstream health care players like Bill Novelli (AARP), George Halvorson, (Kaiser Permanente), Ralph Snyderman, (Duke). They’re talking about integrating coordinated allopathic health care and information across an individual’s personal health plan. Snyderman, said we need to move from “find it, fix it” to a “personal health plan”. Halvorson said (surprise, surprise) that we need electronic health data on every patient, and to not just replicate the current silos of care in our new data strategy. Novelli went straight at the environmental factors—smoking, fast food et al. And to not ignore them. Mehmet Oz (he of the Oprah show) said that

Consumers Need All of the Facts in the Privacy Debate

Feb 26, 2009• 14

By David St. Clair

The economic stimulus package that President Obama has signed contains upwards of $20 billion to create electronic health records for most Americans within five years. The president has been very outspoken in his belief that EHRs are essential to health care reform and that the subsequent savings they’ll generate will help to strengthen the larger overall economy.

Whenever the subject of proliferating EHRs catches the national spotlight, you can bet that debates about privacy aren’t far behind. Indeed the privacy issue has already started to gain some traction in the media. In this video clip, CNN’s Campbell Brown and Elizabeth Cohen examine how easy it is for someone to obtain private medical information online by simply using someone’s Social Security number and date of birth.

While this assessment may be accurate, it’s a bit light on the fairness
scale. Brown and Cohen only make a very brief mention of facts like
President Obama’s plan to appoint a chief privacy officer and to
implement unprecedented privacy controls to safeguard the EHR
transformation. Instead they emphasize the more sensational angle
implying that electronic health information just isn’t safe. They also
seem to downplay the fact that a simple thing like creating a password
can protect one’s private information.

Dartmouth Atlas — cool new tool

Feb 26, 2009• 2

By Matthew Holt

The Dartmouth Atlas releases this afternoon a really cool interactive atlas showing the disparity in Medicare spending between states AND showing the relative growth rates in spending between metro areas. Fabulous graphics, fantastic research and much much more grist for the mill — why was annual average growth in Medica spending from 1992 to 2006 in Miami, FL, 5% while it was only 3% in Los Angeles, California?

And don’t forget what Einstein said about compound interest.