POLICY: Medicare morning-after round-up, with update

So a plethera of information about the Medicare bill emerges after the long weekend.  The weekend instant pundit talk shows that I saw claimed it was a triumph for the President, with the odd real conservative crying into his egg-nog. Bush though decided that going on a lay-over at Baghdad would be more helpful to his re-election, and I think the Prez got the issue right (if not the policy–but this is a health care blog, Matthew!) Meanwhile, Milt Freudenheim in the NY Times reminded everyone that the competition aspect of the law is mostly irrelevant and elsewhere they found a ton of seniors in Florida who think they got stiffed. Over at Democrat blog DailyKos the previous ignorance of and about the bill has been replaced by a bitter screed showing that the rural care aspect of the bill takes money from big-city hospitals (serving Democrats) to rural ones (serving Republicans). While you should take a pinch of salt with that analysis, you should also consider what happens if the AAMC gets riled. Those big-city academic names have a lot of clout in American health care.

Elsewhere Forrester research (log-in as a guest allowed) believes that the bill will have  immediate consequence in three other areas

  1. More drug discounting via new discount cards. Why? Medicare PBMs wanting to get going in 2006 will give deep discounts now to learn seniors’ online behavior, demographics, and drug history. Allow me some doubt on this one, as the PBMs have shown only moderate interest in cash pay cards so far and seniors have little interest in letting them know about those issues! And even if they knew, where in the bill does it say "restrictive formulary" or "co-marketing arrangement".
  2. Redefine the market for hospital services as Medicare requires more quality data. Forrester says this will change hospital behavior and help healthcare IT firms. Maybe. But quality measures have been around and been meaningless before and its the IOM rather than politically maleable CMS that tends to drive this, albeit slowly
  3. Not slow the development of specialty hospitals despite the 18 month moratorium. Agreed.
  4. See a boom in health savings account (HSAs) and CDH. I’m still very unconvinced that employers are biting at this. And remember that MSAs (same as HSAs) cannot logically contain enough health care spending to be effective in restraining health care costs, whatever optimistic conservative theorists believe.  It’s called "insurance" for a reason even if you are a self-insured employer.

Still, while I often find Forrester over-optimistic on the pace of change, they are doing the right thing, which is looking for wrinkles in the Bill that will start changing behavior of market players. So keep looking into the folds of the bill’s flesh both politically and business-wise.

UPDATE: Harvard Professor Bob Blendon (health care’s leading political analyst) gives his take on NPR.  Overall, young people like what they’ve heard; seniors hate it, but it won’t matter politically until 2005.

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