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Be careful what you wish for

Charlie Baker is the president and CEO of Harvard Pilgrim Health
Care
. This post first appeared on his blog, Lets Talk Health Care.

The show is
pretty much the same – every time. Public sector entity gets in budget
trouble, cuts have to be made, and providers who do business with the
public sector get hammered – hard. It’s happened with Medicare at
the federal level for years, and it happens with Medicaid at the state
level with some frequency as well.

Well, the show is back in town, as state governments face declining
revenues. In Massachusetts, the state is not only cutting Medicaid
payments prospectively – it’s cutting Medicaid payments for some
providers retrospectively – simply choosing not to make payments to
them they had planned on and expected.

I must say, each time this happens, I can’t help but wonder if the
hospital operators and physician leaders who think a single-payer like
Medicare For All is a good idea ever stop to think about how these
agencies deal with their financial problems.  When they have a problem,
they unilaterally whack their provider community hard – in ways private
sector payers would never consider.

And then those same providers who think Medicare For All is a great
idea turn to the private health plans they do business with and say,
“Hey – you need to help solve my Medicare/Medicaid deficit – which just
got worse.”

Sheesh. All I can say is, “be careful what you wish for.”

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the poorrbarrbarjdrbar Recent comment authors
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the poor
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the poor

Treating the poor fairly Selling out of the Poor? What would Elmo say? Full Name: Wayne Berman Title: Vice-Chair; Finance Co-Chair; Adviser Over the course of three years, Berman’s lobbying firm was paid $660,000 to lobby on behalf of UnitedHealth subsidiary Americhoice, a managed care HMO providing health insurance to Medicaid, Medicare, and SCHIP recipients. Specifically, according to the lobbying report, they lobbied on Medicaid issues in the Deficit Reduction Act of 2005.[Americhoice Lobbying Reports 2004 – 2007; Americhoice.com ] Berman Also Lobbied For “Absurdly Low” Rates for Medicaid Managed Care Companies to Pay Out of Network Hospitals. Also included… Read more »

rbar
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rbar

Peter, I would tend to agree, and I know from my own current personal professional situation (which is about to change) that inequalities create oversupplies in the affluent areas … I am currently not working at capacity (but still paid well) because I am in an affluent area where my MSG wants to expand, even though there is high demand for my specialty in other areas of the state … … but we should working getting the bottom up and neglect what the rich are doing because that is less important. If doctors get paid fairly when treating the poor… Read more »

Peter
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Peter

rbar, in Canada the weathly/connected are also able to get better/faster care – but that’s doing the system work-around, not because there is a special system for them. I agree that making sure they contribute their share (whatever that ends up being) will provide funding to the rest, but they will drain resources that could be shared more evenly. Here in the U.S. we could use more of the European mentallity of shared community. We are also not talking about care for the poor, but for the middle income sector as well. Watch how fast in this country Medicare for… Read more »

rbar
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rbar

Peter, I used to work in Germany which is fairly egalitarian, at least in HC matters. If you have a rich and/or famous person in your hospital/office, or just a patient of somewhat higher socioeconomic status, they almost always got slightly preferential treatment, even if the payor was the same. At times, they received more tests than necessary, which is the downside. This has to do with people of higher socioeconomic status being better able to claim their rights (succesfully complain if necessary), the narcicissm of treating and pleasing the more powerful, and also the fact that many (but not… Read more »

Peter
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Peter

rbar, I think you’re too optimistic about a 2 tier system working in the U.S. It’ll end up being Medicaid for most. I’m not in favor of controlling the rich, but I won’t set up a special system for them that will bleed the rest of us of good care.

charlie
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charlie

I wrote a post on my own blog – which was actually picked up by this blog – called “Health Care and the Presidential Campaign” in which I outlined the three or four things on which I thought political and policy common ground could be found in 2009 and beyond. I think that post – which was designed to capture some of the common themes I’ve heard rattling around in the reform arena – is consistent with a number of the comments listed here today. I won’t repeat what I said in that post except to say that I believe… Read more »

jd
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jd

Please ignore the parenthetical remark “(removal of payer profits).” The 3-10% reduction relates to removal of admin costs from our current, uncoordinated multi-payer system while the the 1% reduction refers just to the net income of private payers (for-profit and not-for-profit). I would go through the calculations again, but those who know the system well understand where they come from.

jd
Guest
jd

I think the misunderstanding extends to advocates outside healthcare as well. They often are convinced that payer profits and administrative costs are the bulk of our cost differential with universal health care systems, so that once we get single payer that almost by itself will align our costs and reduce expenses by 30% or more. As you know, the reality is nowhere near this number. Improvements in administrative efficiency (the removal of payer profits) can bring a reduction in total health care costs of somewhere between 3% and 10%, while the elimination of private payer profits will remove about 1%… Read more »

DX
Guest

Charlie – I missed your “about” link on your page, so I didn’t know that about your career. I appreciate that some of these programs are dysfunctional – but they’re designed that way. Your example of coordination (or not) between Medicare and Medicaid is troubling, but also begs the question of my comments – why do we have two programs in the first place? You seem to be saying that problem is fundamentally political, and therefore more or less intractable. But most of everybody who advocates for single-payer or universal care thinks it will take a massive political effort. It’s… Read more »

rbar
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rbar

I think a two tiered system would be fine as long as everyone pays into medicare, and that madicare can guarantee a reasonable standard of care … the very wealthy always get some degree of extra attention and treatment (at times to their disadvantage), and thus will stay that way. There is no doubt that medicare needs reform, and that we have to address overtreatment and practice variation. A strong nationwide system interested in effective care (not profit) of its members is the best way to handle this. It is funny that the free market advocates and the McCain campaign… Read more »

Peter
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Peter

Charlie, are you just concerned for the docs or is your privider cuts comment also for device makers, supply companies and drug companies? If you are speaking about unilateral cuts to docs then I agree with you, but the, “avoid paying for the full cost of their own beneficiaries” comment seems to imply that docs are the only ones that know what their service should be valued at – the way they’ve advocted for years in their quest for imposition of guild rule. In Canada reimbursements to docs are negotiated with an eye on budgets (tax money), and there, there… Read more »

Gary L
Guest

My exact comments in my blog yesterday at http://anyviewfromhere.blogspot.com and http://healthtrain.blogspot.com
We will continue to be harassed and then offered the ‘false carrot’ that universal payor or health will do away with the ‘problem’, rather than properly identifying the root cause of burgeoning administrative overhead….studies, grants, regulatory, etc

charlie
Guest
charlie

DX – And in response to your first point about the LA Times article, I would point out – again – that the markets in which disputes between payors and providers run hottest tend to be ones in which health plans have consolidated. As a result – and I’m paraphrasing the authors here – providers (and probably employers and members) don’t feel like they have a lot of options to choose from when disputes over what’s covered and what’s not arise. I wonder if this isn’t exactly the scenario that would play out under a single payor. As someone who… Read more »

DX
Guest

Charlie – I’m again going to point to the LA Times article about private payors not paying bills, but I’m aware that you responded on your own blog. That said, I think you’re being a little insensitive to your patients. I realize you’re writing mostly to fellow docs – but this isn’t about not paying doctor’s bills, it’s about not paying for poor people’s care. Our society – and our leaders – always find it easier to skimp on poor people. That’s why Medicaid is such a shambles in most places – when there’s a budget crunch, the poorest (and… Read more »

charlie
Guest
charlie

Peter – I’m not suggesting that everything, and everyone, in the private sector is grand. I’m simply stating that public entities like Medicare and Medicaid use the presence of private payors to avoid paying for the full cost of their own beneficiaries, which should give providers some concerns about what life in a Medicare For All world might be like. Second, if the problem is over-utilization (and I agree that that is a big part of the problem), why do we/they think that Medicare – the ultimate Fee For Service / Drive the Volume / Pay for Technology but not… Read more »