Matthew Holt

Connecting finance to coverage

Repeating his message that Health Costs Are the Real Deficit Threat OMB Director Peter Orszag goes into the not exactly friendly territory of the WSJ Opinion pages and explains that practice variation is unnecessary and wasteful, comparative effectiveness research is a good idea. and that changing financial incentives for providers is necessary if we are ever to get health care costs under control.

The question is, how much of this gets included in the woffling coming out of Sen Max Baucus’ Senate Finance Committee? Here’s the press release on the options they’re considering. It’s a little like Stalin in 1930 saying, ‘the people are starving, we may collectivize the Kulaks, or we may rent them their farms back, or we may do nothing, or all of the above”. OK you may think I’m kidding but they give four different options for what a public plan may look like, six different approaches to small group and individual market reform (none of which deal with the smallest employers), and nothing about Orzsag’s concept of “changing financial incentives for providers”. Apparently that’s unrelated to insurance reform. (Yes yes I know they’ve floated some trial balloons about that too….)

What worries me is that because of the downturn and Orszag shining the light on the finance issue, we may have the chance to both fix coverage and finance. But I don’t see this all happening together.

So far I haven’t seen anything to change my mind about what’s going to come out of this process. So to bore all of you still reading I’m going to repeat what I said when I reviewed Tom Daschle’s (remember him?) book Critical.

So my guess is that the Federal Health Board, if it gets established, will get defanged by lobbyists immediately. The consequence of that is that the mish-mash of an “expand what we got now” system will cover a few more people at a lot more cost (as has been the Massachusetts experience). That’s OK because suddenly we’re rich (or at least suddenly the government is pretending it is!). But in a few years the stimulus will end and health care costs will have kept going up. Then we’ll realize that due to more cuts in Medicaid & subsidies for the working poor, and continued cream skimming and bad behavior by private-sector health plans, enough people have fallen through the cracks of the incremental expansion that we’ll be back where we are today again.

CODA: Click here to have some fun as to what happened when Baucus lined up 13 Democratic economists to talk about health care to his Committee and somehow couldn’t find even one who was in favor of single payer…

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Deron S.
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Carol – Asking each individual to contribute to reform by taking care of themselves is an exercise in futility. We may have screwed up our healthcare system, but we don’t have to contribute to the fix. That’s what we have a government for. Seriously though, I agree with a lot of what you say. Unfortunately we’re going to have to sit back and watch politicians struggle to put a band aid on a heart attack. When the smoke clears, more people will start to realize that we wouldn’t need such an expensive healthcare system if we had a healthy public.… Read more »

Nate
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Nate

“The insurance industry is prepared to accept community rating and guaranteed issue in exchange for a coverage mandate,” Of course they would, this would provide cover for them to increase rates on everyone. They make 6% profit on the premium, anything that would legislativly drive premium through the roof and force people to buy it will be supported by the insurance companies. We the people need to stop community rating, just look what it did to CA small group, they underwrite in a 20% band, from .9 to 1.1. What motivation does someone have the take care of themselves, be… Read more »

Carol
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Carol

Frankly, I have not heard one iota of discussion about personal responsibility of citizens of our great country. The single most successful solution for our COST CRISIS (actually an over use crisis) is for each able bodied human being to exercise 3-7 times per week. Meaning reaching a 75% THR. Even slightly overweight to obese individuals are 100 percent healthier that the Non-exercising skinny (not a high percent of these humans exist) slightly overweight to obese humans. Exercise elevates mood, reduces depression, decreases high blood pressure, increases energy, and decreases body fat, etc. If humans were more fit they’d get… Read more »

Ed Fleegler
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Ed Fleegler

For anyone who missed the opinion page in the Saturday WSJ–read Peggy Noonan’s column. Money fuels health care. The government’s responsibility is to define through legislation how universal health care will be enacted in our country; and, how it will be paid for–as I indicated in my last blog entry. The rest as outlined by Peter Orszag is as Peggy Noonan defines: ” New class gobblrdygook, which is more prevalent than ever, is also more destructive than ever…” We are a great society–but have somehow lost our sense of social justice and responsibility. Once “health care reform” is in place,… Read more »

Barry Carol
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Barry Carol

A couple of days ago, I listened to a conference call with Jonathan Gruber of MIT sponsored by J.P. Morgan Chase. Gruber is a liberal who was one of the key developers of the Massachusetts health insurance reform plan. He also was one of 13 experts who testified before the Senate Finance Committee a couple of days earlier. He suggested that there is a strong prospect that a reform plan can pass this year that significantly expands coverage via an individual mandate, an employer mandate and sliding scale subsidies available to those with incomes as high as 400% of the… Read more »

Nate
Guest
Nate

“This issue is much too ripe to fail this time.” I don’t think you understand why reform is being proposed Dr. Rick. All the desire for reform from Democrats has nothing to do with fixing our healthcare system, it is 100% about the money. Congress needs trillions of dollars to save SS, Medicare, and Medicaid. If they don’t come up with this money from somewhere those programs will be cut or eliminated. It takes a cold day in hell to kill entitlements, the verge of federal bankruptsy would be that day. Once killed it would be 50-100 years before any… Read more »

jd
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jd

tcoyote is right that the leadership got ahead of the membership for many of these lobbies. Or to put it another way, there was less unanimity among the membership than might at first appear, and now the leadership is getting an earful. This seems to be especially true with AHA and device manufactures. But Matt, I still think this really misses the political reality: “What worries me is that because of the downturn and Orszag shining the light on the finance issue, we may have the chance to both fix coverage and finance.” When is it going to sink in… Read more »

Dr. Rick Lippin
Guest

Single payer is not going to happen.But Obama -despite Baucus-is NOT going to back off of a public plan option component to reform.
The so called extrememely powerfull lobby for the disease care industies are on the ropes and they know it.
Health care WITH A PUBLIC PLAN OPTION will be a reality by the end of this year.
This issue is much too ripe to fail this time.
Dr. Rick Lippin
Southampton,Pa
http://medicalcrises.blogspot.com

MD as HELL
Guest
MD as HELL

It is great fun watching all of you try to ban freedom and provide something for nothing to people who only want it at all because they don’t pay for it.
Get real. And will someone please define “basic healthcare”? That way there might be something for IT to measure.

Ed Fleegler
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Ed Fleegler

Orszag wrote in the WSJ: “There are four key steps: 1) health information technology, because we can’t improve what we don’t measure; 2) more research into what works and what doesn’t, so doctors don’t recommend treatments that don’t improve health; 3) prevention and wellness, so that people do the things that keep them healthy and avoid costs associated with health risks such as smoking and obesity; and 4) changes in financial incentives for providers so that they are incentivized rather than penalized for delivering high-quality care.” Let’s get real. Money is what fuels health care. John Oberlander wrote a wonderful… Read more »

rbar
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rbar

Orszag wrote in the WSJ: “There are four key steps: 1) health information technology, because we can’t improve what we don’t measure; 2) more research into what works and what doesn’t, so doctors don’t recommend treatments that don’t improve health; 3) prevention and wellness, so that people do the things that keep them healthy and avoid costs associated with health risks such as smoking and obesity; and 4) changes in financial incentives for providers so that they are incentivized rather than penalized for delivering high-quality care.” ad 1), I really would like to seriously discuss how EMR can help (I… Read more »