Headlines You’ll See in 2014

Affordable Care Act major issue in Campaign 2014; ‘fix and repair’ new focus. ObamaCare will be the defining issue in the coming election cycle, but the political debate will not be Healthcare.gov glitches or enrollment.

Rather, the issue will be sticker shock in insurance premiums and the complaints from doctors and hospitals that they’re being driven out of business. “Repeal and Replace” will not be heard; the new slogan will be ‘fix and repair’ for both friends and foes of the ACA.

Hospitals battle for survival. Faced with negative operating margins, sequester cuts and mounting bad debt, state and local officials and hospital boards will take dramatic steps to insure acute services survive. Some will merge local hospitals to be operated as a public utility.

Some academic medical centers will spin off their research enterprises into commercial ventures with bio-pharma and device partnerships. Some will merge or sell out to larger systems with stronger balance sheets.

And all will reduce operating costs and purge clinical programs no longer affordable. As patient demand and their severity increase, hospitals will operate their inpatient business as a cost center, and their enterprises as regional care management organizations assuming risk for costs, outcomes and safety. But none is delusional: hospitals face a battle for survival.

Physicians go it alone; holy war for future of the profession taking shape. Led by the American Medical Group Association and several specialty societies, large medical groups will join forces to advance a physician-centric platform for health reforms that protect physician-patient relationships, position primary care physicians as gatekeepers, and assume financial and clinical risk in contracts with insurers and employers via fully integrated health plans operated by the group.

Physicians will step up their political activism in 2014, armed with data showing their net incomes have suffered and their clinical autonomy compromised since the onset of health reform. In 2014, they’ll wage unsuccessful battles for replacement of the SGR and liability reform again.

And they’ll dust off advocacy advertising campaigns to drum up resentment of market pressures that threaten to deduce their profession to a guild employed by plans or hospitals. For doctors, 2014 will look like a last stand for the profession.

Occupy Health Care Breaks out; profits with purpose sought. Income inequality in the U.S. will spill over into health care in 2014. The social media fueled visibility of earnings and executive compensation in every sector of health care will spark local political activism.And interest in a single payer system will begin to build heading into the 2016 election cycle.

Just as value will be challenged, so will the morality of the U.S. health system, and a populist campaign to align profit with purpose sought.

Value in health care questioned. The U.S. health system is notable in access to the latest technologies and drugs for treating disease, but at a cost exceeding every other developed system in the world. And the outcomes in many of these countries are equivalent or superior. Just as the value of higher education is under scrutiny, with notable disruptive innovators like Western Governors University taking aim at its value gap, so is health care vulnerable.

The value gaps in the healthcare system are legion—made all the more traumatic since the U.S. industry feigns transparency about its costs, prices, outcomes and user experiences. Its value gap is just as noticeable to all–“have not’s” and “have’s”, young and old, sick and well. Why do pills cost so much? Why are insurance premiums so high?

What are hospital prices so wildly different for the same procedure? And where does the money go? Employers and consumers will lead questioning of the system’s case for value: their scrutiny will impact every hospital, plan, physicians and supplier in the U.S. health system.

Individual mandate delayed; insurers look for deals. Most of the 2.1 million who signed up for coverage by December 31 were those eligible for a subsidy or those needing a medical problem treated urgently. The young invincibles have been no shows to date. The penalty–$95/1% of AGI—is simply not punitive enough to persuade the young and healthy to enroll, and the math underlying the ACA assumes large numbers of them will buy. So, the individual mandate will be delayed so it can be fixed. The announcement will come soon after the March 31enrollment deadline to neutralize it as an issue in Campaign 2014.

And, behind the scenes, deals with the insurance industry will be negotiated to reduce the 2014 excise tax ($8 billion) proportionate to the shortfall in enrollment though predicated on cooperation going forward. Blue Cross Blue Shield Association affiliated plans will seek unique responsibilities and opportunities to boost coverage while also seeking special dispensation vis a vis the investor owned plans with whom they compete.

The uneasy co-dependence between the private insurance industry and the administration will wear thin unless deals are cut, and the issue will be not how many enrolled but whom.

Costs spiral, employers respond. Total healthcare spending increased less than 4% for the past 3 years, but will increase 5-6% in 2014 as a result of new enrollees receiving care, pass-through costs of the ACA’s taxes on insurers, and medical inflation. Employers that provide insurance coverage feel the increases hardest and they’re not sitting idly. In 2014, they’ll promote high deductible plans through private exchanges to their employees along with narrow networks and reference pricing.

Some will drop coverage altogether and pay the penalty, if they don’t put themselves at a talent disadvantage to a competitor. And administration officials will likely revisit the ACA’s definition of “fulltime” employment (currently 30 hours weekly for companies with 50+ employees) to discourage cuts to hours in sensitive industries i.e. restaurant, retail, hospitality and others. In 2014, most employers will continue to play the employee insurance game, but their game plan will be more aggressive.

Health insurers acquire health system. Health insurers, armed with capital, operational infrastructure and data, will acquire major health systems as incentives pivot from fee for service to value-based payments. Acute downsizing, population-health management, and cost reduction will be their immediate focus as local employers watch for cost reduction, regulators scrutinize anti-competitive impact, and physicians try to judge what their role will be.

And while so doing, the ranks of the private insurance players will thin as the strongest national and regional plans take market share from their smaller and weaker counterparts.

States recalibrate Medicaid expansion. In the 36 Governor’s races in Campaign 2014, Medicaid expansion will be a key issue. In the 25 states that expanded, costs for new enrollees, and access to doctors and hospitals will be the challenge. (one year increases for PCPs go away). For states that didn’t expand, pressure to develop a work-around so hospitals don’t go broke will be headlines.

But “managed Medicaid” outside some Deep Red states will face hurdles—how private insurers deliver on their promises to manage costlier and complex Medicaid populations better. In 2014, state legislators and Governors will focus on Medicaid cost to the state, whether expanded or not.

Medicare ACOs savings less than costs. After accounting for consulting fees and costs for information systems and staffing, net savings in the Medicare Shared Saving Program (MSSP) will fall short of the costs for their set-up and operation. ACOs sponsored by hospitals will use a backdoor to mitigate physician disaffection; physician sponsored ACOs will struggle lacking a capital partner.

Many of the Medicare ACOs will be suspended in 2014 while ACOs focused on commercial populations will gain momentum. As a result, ‘accountable care’ arrangements will expand to include episode-based payments and case management services to drive higher savings in higher cost populations for employers, as well in Medicare and Medicaid.

Paul Keckley, PhD is an independent health care industry analyst, policy expert and entrepreneur. Keckley most recently served as Executive Director of the Deloitte Center for Health Solutions and currently serves on the boards of the Ohio State University Medical Center, Healthcare Financial Management Leadership Council, and Lipscomb University College of Pharmacy. He is member of the Health Executive Network and advisor to the Bipartisan Policy Center in Washington DC.  Keckley writes a weekly health reform newsletter, The Keckley Report, where this post originally appeared.

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59 replies »

  1. I remember Paul Keckley from an ultra-fundamentalist church that I went to back before I knew better. Paul Keckley was an arrogant asshole. He taught what was supposed to be a Sunday School class. Instead he just talked on and on about his business and personal exploits.

  2. Poignant. You merit an entire chapter of the DSM, bro’. But, keep digging…

  3. And a troll who attacks anyone who does not parrot said troll’s opinions.

    Frankly, your attacks on any doctor who is not subservient to the agenda of PPACA or preaches autonomy and independence is simply a jerk, in your holy opinion, eh?

    By the way, what has Obama promised you to be so voracious in defending him? It’s about money, count on it!

    So I think he has at least antisocial traits, I guess I should be imprisoned or banished to a deserted island? What makes your position so high and mighty I have to shut up and read just your drivel?

    Oh yeah, Saul Alinsky tactics again. Who by the way some think Alinsky very antisocial, if not downright sociopathic. And which 2 politicians have outwardly said they like him? Obama and Hilary Clinton, she who did a thesis on Alinsky.

    Thanks for making your case.

  4. A physician publicly pronouncing a psychiatric dx regarding a man who is not his patient and who he’s never met.

    And angrily wonders why he’s not taken seriously. Gotta love it.

  5. Headlines you won’t see, as long as the Left/Democrat controlled media continues to shill for the needs of the few, and minimize the fall out on the many:

    1. More people in the US now are working part time jobs than in the prior 40 years, and income continues to fall on a whole for about 50% of employed middle class Americans.
    2. Premiums continue to rise at rates greater than 20%, and deductibles also rise at least 20%, and therefore less people are accessing health care services for preventable or reasonably quick care interventions.
    3. As acute care needs rise in both ER visits and hospitalizations for illnesses preventable by prior outpatient services, morbidity and mortality rates begin to rise by the end of the year.
    4. More people chose to go without health care than expected by Democrat postulates, and thus health care expenses rise to pay for the uninsured percentage ongoing.
    5. More physicians retire or chose to not provide full time services for populations previously served, and thus patients now endure longer waits to be initially seen and be offered follow up care access.
    6. Mortality rates for treatable cancers, chronic renal diseases, and chronic cardiac conditions are rising as treatment interventions are limited by the IPAB.

    Yeah, I am sure those above lines are so absurd. Keep getting your news from the mainstream media and sites like this, you’ll be happy. Oh, if you are a partisan shill and profiting from interfering with health care interventions so money goes into wallets, not health care systems.

    Oh, and by the way, here are the criteria for Antisocial Personality Disorder from the DSM 4TR ( I have no interest in the DSM 5), and try to step back and be a bit objective in thinking how they apply to politicians:

    1.failure to conform to social norms with respect to lawful behaviors
    2.deceitfulness, per repeated lying, use of aliases, or conning for profit or pleasure
    3.impulsivity or failure to plan ahead
    4.irritability or aggressiveness
    5.reckless disregard for safety of self or others
    6.consistent irresponsibility, per failure to sustain consistent work or honor financial obligations
    7.lack of remorse, being indifferent to or rationalizing having hurt, mistreated, or stolen from others

    other preset conditions are age over 18, pattern of disregard for and violation of rights of others since age 15, and while I disagree with this preset prior dx of Conduct disorder as an adolescent, that is one as well.

    Per defining past history to collaborate if applicable to A.P.D/O, interesting we have a President who no one really has been able to collaborate, or refute what Obama tells us is gospel in his TWO autobiographies. His academic history is still withheld. He has a documented history as an adult getting guidance from those who have actively or previously promoted hate and violence.

    Yeah, really sells me he is a saint. Hey, there are still people out there who think Hitler and Stalin were wonderful leaders. Extreme comparisons, sure, but, they started out trying to woo the populace too. Hey, we all agree tyranny is covert until it is entrenched, true?

    But, the above criteria fit many other established politicians as well, so I am not picking on the President alone. Just keep denying and minimizing the role of antisocial/sociopathic people who gain positions of power, authority, and influence. They depend on those of you who won’t accept the truth.

    It is what is is. How is that for pushback?

  6. Don’t confuse astringent pushback with outrage. YOU are the one evincing all the outrage here. I’m no “troll,” pal, I am fully traceable. There are things in this world worthy of outrage. You are not among them, by any means.

    When you call the President “anti-social” and any others that disagree with you “sociopaths” you are gonna get pushback from me. Simple.

  7. Are you as obnoxious to people you allegedly call on in your business as you insult here without provocation over half the time? Frankly, why the blog authors tolerate your troll behaviors seems to indicate the covert partisan agenda I believe exists here.

    And yes, for the final time, I am a physician, and when you make some effort to google me, you’ll figure out why I talk about such issues.

    Which, by the way, since you react to those comments with such outrage, did I touch a nerve in you? I find those who are quick to react are often trying to squelch the dialogue to get the spotlight off. Off the antisocial and sociopathic crap going on that validates the charge more often than not. And there is a lot of criminal behavior going on in health care.

    By doctors at times, but mostly by those looking to profit ant way possible. The newer post above noting the 12 things to likely happen in 2014, some mention much impropriety to happen.

    Oh, and you seem to be trolling there too. Coincidence? Or, just trying to deflect and distract. By the way, google “projection as a defense mechanism”, and maybe some of your commentary will be used as example?!

  8. “And I know there are commenters who again just smirk or want this commentary squashed. ”

    Smirking works for me. Your poignantly incoherent comments don’t rise to the level of needing anything more.

    Are you REALLY a physician? You keep repeatedly throwing words like “anti-social” and “sociopathy” loosely around. It just serves to invalidate anything constructive you might have to add. I guess it’s a good thing you post with an untraceable screen name.

    Here’s a nice link to the truly “anti-social” crowd, the 1% of the 1%: http://video.pbs.org/video/2296684923/

  9. 🙂

    See “The Drunkard’s Walk Theory of Evolution” — the late Dr. Steve Gould. Occams’s Razor elegance.

    The progeny of microbes, which remain the dominant biota mass on the planet.

  10. “…. we are descended from monkeys…”

    Well unless you’re Rh negative. LOL

  11. “Friends”, either a comment made needing a sarcastic font, or, you consider a friend the person who has the weapon facing you, or perhaps better to not know the assault is coming from behind?

    Physicians have no friends in this system now, as Tears for Fears so aptly named the song, “Everybody wants to rule the world”, in this case, the health care world, and that means who owns the cash.

    It is just so offensive to the profiteers who aren’t in the doctor’s office/hospital that the doctors really do put the monies outside the income needs of the participants back into the system to make it better, not just buy more houses, yachts, and cars.

    Which is what profit is for the business model at the end of the day. It is not about what you do, but about what is made. Hence why the business model doesn’t fit health care. But, truth and responsibility have no place in this discussion about really improving the health care system, true!?

    It is why I know sociopathy is thriving in the health care management environment. Keep using empathy and caring as a disadvantage by those who possess it. And I know there are commenters who again just smirk or want this commentary squashed. People don’t want that attention to criminality in action, that could lead to, gasp, consequences!!

  12. Just incredible how not only partisan some are, but just reflexively spew rhetoric from the playbooks of either party like parrots.

    Face it, some of you really are just Republocrats, your agenda is not only about your party, but maintaining this illusion of a two party system, you want your opponent to be black and white. Grey in choice is never an option, true?!

    Frankly, I think the Republocrats are genuinely fearful that the public is now willing to consider alternatives, whether they be a third party, pure independent, or look for people who really are moderates in either end of the Republocrat system and want to negotiate problems, not keep them polarized and thus beneficial to the party agenda.

    I know the stats, and if the election depended solely on who was registered and vote accordingly , neither side would win a majority amount of the vote. 38% don’t want to be associated with a party, and by Nov 3 2014, I sense that number will be over 40%.

    Gee, you partisan hacks will have to come to us to win, and maybe at least in some elections, you will have a third choice to screw up your election choice for an office. But, some of us are on to the lying, manipulating, and pure dismissal of the public interest.

    Here’s an interesting prediction for 2014 primaries and general elections: more than 20% of incumbents will lose in federal election offices, and that is for both parties.

    So, maybe the Status Woe might be altered a bit for the next cycle.

    That suggestion might really annoy some of you, eh?

  13. The practice of medicine, as it might have been visualized by Norman Rockwell, for the cover of the Saturday Evening Post, showing Dr. Goodheart greeting a patient in his waiting room, is functionally obsolete. Physicians face a choice between bargaining with insurers, flight abroad, or laboring for wages set by the government. If they prefer the first of these options, they need to be more mindful of who their friends are.

  14. As long as there is divided government, the Repubs will continue do everything in their power to ensure that ACA implementation is hobbled, including running the FUD machine on 11.

    If Dems retake the House (unlikely but not impossible) and keep the Senate (a toss up) in 2014, then it’s a whole new ballgame.

    The healthcare system is the US economy. Growth in healthcare delivery, healthcare administration, drugs, devices, distribution, health IT and everything supported by them (housing, commercial real estate, IT services, auto, etc.) keep huge swathes of the economy afloat and tens of millions of people employed and the wealthiest class of Americans (i.e. physicians) comfortable enough with the status quo to oppose rational change that hurts their short-term self interests.

    What will it take for physicians in America to unite to positively remake the healthcare system in a way that is rational in terms of cost control and professional accountability, supports universal coverage and radical improvement in terms of quality and safety? Who knows. But that’s what it’s gonna take (in my opinion).


  15. The ever increasing number of stakeholders in medicine is choking the industry to death. Initially, doctors owned clinics and many hospitals. Patients paid directly, fee for service. Then, third party insurances aided in paying, and the control was ceded to third parties. No one complained, because patients were well covered, and medical providers were paid well. Next, the Medicare expansion provided for future mandates, which were soon to become unfunded mandates. Insurance companies tried to reign in costs, and soon became large publicly traded companies, trying to maximize profits for their shareholders and Wall Street. Then, the government wanted to take over healthcare, as it does represent one sixth of the American economy. It is impossible to believe that an individual provider can tackle this system from the top down. On the other hand, they may be able to tackle it from the bottom up. Despite all of this bureaucracy, the entire machine can only start when the doctor sees the patient. The doctors have completely forgotten this. Will the medical profession wake up and take advantage of their strength, the fact that they are really the most essential cog in this ever growing complex and cumbersome wheel? So far, there has been no convincing evidence to demonstrate that the profession will actually wake up, as evidenced by their inability to defeat the flawed SGR formula, and their inability to have a true seat at the table guiding the future of medicine. Will the profession wake up? If history is any indicator or future events, the answer is no. But since most patients would rather be treats by a doctor, rather than an insurance administrator, or a politician, or a committee or board, it would be in the best interest of America for the medical profession to wake up. Sleep now, and pay later!! http://www.ratehospitals.com is watching and monitoring changes in the healthcare industry.

  16. The way I see it the consumer stakeholders continue to be: Medicare, Medicaid, employees with insurance provided by their jobs, the rest (self-employed, employed by small companies that haven’t provided insurance, part-time employees etc).

    Medicare will stay pretty much as is.

    Employees with job-provided insurance will also see things about the same. For insurers and the self-insured companies, the pool of people with good jobs remains a relatively healthy bunch and can continue to be provided with insurance, about the same as before.

    Medicaid stays as it was, except that it gets substantially expanded.

    The big change obviously is for the last group, which is now provided with insurance on the exchanges. Since that group is going to be overrepresented with patients in poor health, it is going to be an expensive group.

    Who pays for this expensive group, as well as for the Medicaid expansion? The government, obviously, with its subsidies for consumers on the exchanges, and funds for Medicaid.

    To think that this system will be anything close to budget neutral, through Medicare savings, for example, is just dreaming.

    In my opinion, what it will ultimately boil down to is not problematic websites, not lost policies or skyrocketing premiums for most, but simply a huge drain on the federal budget. How this is dealt with will be the big question.

  17. They are outraged at the notion that we are descended from monkeys. But, they are unaware that we are really the progeny of a 4+ billion year random walk begun (and continuing) by microbes.

  18. Looking at the polls, one can debate just where the electorate presently stands on the ACA. There can be little doubt, however, that the trajectory is not favorable to the administration. This suggests that those yet unaffected, covered under group plans, are viewing with great concern what is transpiring in the individual market. Recent polls also suggest that the administration has suffered a substantial loss of credibility.

    Getting back to insurers, I whiled away some leisure time the other day by looking up the primary stockholders of the major health insurers. In every case, they are large mutual and retirement funds. The supposition that they would turn a blind eye to extravagance and waste takes us into conspiracy theory. I am also at a loss to understand the apparent suggestion that, in pursuing their own interests by negotiating with providers, they do not advance the interests of consumers.

  19. “The antisocial, criminal, and plain selfish bastards that compose much of the support behind Obamacare depend on this absurd ignorance and stupidity to prevail.”

    Sixty-seven percent of Republicans don’t accept the theory of evolution.

  20. Bob:

    I agree time will tell, but this is my best guess given what else is occurring. ACA is far too big to be viewed in a vacuum. The overall health of the economy must be considered as well.

    I think even with mandate delays big and small businesses will begin to take hits this year and many of their employees will feel it. I think the bill also encourages companies to not hire and perhaps even further reduce positions.

    And I think this is a large enough of a group where it matters. All one needs is enough in the swing vote to move right. And for those that don’t get hit they can certainly now see the writing on the wall so more move to the right.

    So dems up for re-election in 14 in tough races will move away from the admin, but so will dems not up for re-election.

    Feinstein, for example, moved very quickly when so many had their policies cancelled in California. I think bad experiences with ACA nationally will force a lot of dems to turn away from the admin.

    But as you say time will tell.

  21. Thanks for illustrating my point.

    I get the sense easier for you to follow; leading is, what, too time consuming? Don’t worry though, you do make a point, medicine is filled with whores and cowards, so taking a stand against impropriety is going to require people who don’t echo your point of view.

    Shame people confuse the Hippocratic Oath with the Hypocritical Oath.

  22. BC, I am not sure that the whole middle class is getting hit the hardest.

    The people who had preferred-risk policies in the individual market are certainly getting hit hard, and they are an articulate group, and they are not shy about telling journalists about their problems.

    Meanwhile there are vast segments of the middle class who are untouched:
    employees of large self-funded businesses, government employees, nearly all Medicare recipients.

    I am not contesting your observations. I am only saying that the administration may not be abandoned quite as soon as you suggest.

  23. I think the author is missing just how poorly thought out and structured ACA is. The admin is in a great deal of trouble on this one.

    I’m sure the admin will try to debt finance it, which creates another set of problems as the Fed is trying to taper QE and frankly national debt is just too high.

    I’m also sure that the admin would love to turn this into a discussion on income inequality, but it’s the middle class that’s getting hit the hardest. This very large voting block will aggressively go after Congress as the year progresses and the admin will be abandoned by a great many dems.

    Then you have unknowns like economic drag, increase in unemployment, potential geopolitical instability and shaky financial markets.

    I agree that anything like this would need modification, but the short and medium term pain/problems are far too great to politically support anything but a full reboot.

    Finally, support for the admin will become so weak that all the dirt on any number of scandals will begin to surface and things will become extremely ugly in Washington. ACA is DOA something that will become increasingly apparent as the year progresses.

  24. My “populism” is fairly circumscribed. I’m with you on your observations.

    Someone once observed that people will pay a couple hundred a month for cable with high-speed internet without blinking an eye, but bitch about a $25 co-pay. I don’t have any problem paying OOP for my routine needs, and buy catastrophic coverage to hedge against the stuff that would BK me.

  25. The care can be good, adequate, respectable. The problem is compliance, and that will be the biggest issue with the “lower tiered”
    patients, many through no fault of thier own.

  26. It is simply disingenuous and dishonest how so many here instinctively know that pure profit seeking is incongruent with the principles of health care, and yet you continue to either deflect, deny, or just ruthlessly state “that’s just the way it is!”

    After reading the exhaustive pontificating, the statistics dumps, and the overt denials and projections onto those of us who are on to the profiteering going on endlessly, this site doesn’t provide much of a beneficial service for the public, but just a refuge for the selfish and insincere.

    I do like the idea of responsible and invested doctors rebelling against the corrupt and disruptive elements that think their endless assaults hidden behind alleged caring platitudes and partisan political rhetoric will prevail.

    It is time to strike, and let the politicians of the states and fed come after us. I want to watch first hand how all these health care allied supports will just step in and replace physicians, as the persistent antiphysician lobby here so gleefully smiles in reading this reply.

    People need to find out how important and crucial to the health care system doctors are, but, not the sell out profiteers with MD after their names.

    It is the proverbial hot stove America has to touch, yet again. If you read George Will’s latest op-Ed piece in The Washington Post from January 2, how do you react to read almost 20% of Americans think the Sun revolves around the Earth? The antisocial, criminal, and plain selfish bastards that compose much of the support behind Obamacare depend on this absurd ignorance and stupidity to prevail.

    I know in my heart some usual commenters are softly chuckling right now, if not boldly exclaiming in so many words “and you won’t win, asshole doctor”.

    Readers with a soul here, you think I am wrong in that assumption?

  27. Bobby, I like your populism in general, but health care is I think a little different.

    The care provided by Medicaid today (with all its flaws) is better than about 80% of the rest of the world receives, and better than about 99% of human history.

    A person on Medicaid today gets better care than an American President got up until World War II.

    If a public health program did nothing more than ensure safe childbirth to all, and treat all accidents and injuries to current standards, and prevent communicable diseases, that in itself would be better than most of world history.

    In the long run we have to ask if government has an obligation to pay for every non-contagious illness or every risk factor.

    If you have AIDS or head lice, I am glad to help pay for your treatment. If you are hti by a car, I am glad to help pay for you just based on the Golden Rule.

    But if you have high blood pressure, that does not give me high blood pressure. And we are all going to die of something.

    Just for the record, I am way to the left on what I call public health. I want free emergency rooms and free children’s health care etc.

    But I am to the right I guess on what I call public health. The vast majority of 60 year olds who have chronic illnesses have earned their problem, and as long as we have generic drugs I say let the other 60 year olds deal with things themselves.

    Bob Hertz, The Health Care Crusade

  28. “Assuming care provided by the bottom tier is at least adequate by some reasonable standard, I don’t think such a tiered system would be so terrible though I know the liberal egalitarians will be horrified.”

    This is more broadly known as “The Shit Sandwich Theory of Life — The More Bread You Got, The Less Shit You Gotta Eat.” Pretty much how the world operates in general.

  29. I don’t know about Bobby but Michael Moore is a liberal ideologue. I have zero respect for anything he has to say on this topic.

  30. Bob –

    Princeton’s Uwe Reinhardt, in his essay a couple of weeks ago for the NYT’s Economix Blog, suggested that the U.S. healthcare system seems to be evolving into a three tiered system as follows:

    For people on Medicaid and the uninsured – a budget constrained system of public clinics and public hospitals.

    For the employed middle class and Medicare beneficiaries – A defined contribution (voucher) approach coupled with private exchanges and reference pricing.

    For the wealthy – The sky’s the limit.

    Assuming care provided by the bottom tier is at least adequate by some reasonable standard, I don’t think such a tiered system would be so terrible though I know the liberal egalitarians will be horrified.

    By the way, if you opt into the private system in Germany, you cannot come back into the public system unless you can prove you are destitute. Insurance premiums in the private system are lower for younger people which are one of its attractions.

  31. There are numerous health care systems (Germany, Australia for examples)
    that combine universal insurance with the opportunity to pay for for higher quality.

    Canada is indeed a hard-core Single Payer nation that actually bans many forms of expensive private care.

    But Canada is the outlier in this respect.

    In the USA, I honestly believe we could have half the population on Medicaid and the other half buying their own preferred form of health insurance. Taxes would be higher than now but the system would work.

  32. No, the “easy out” will be just to put off the mandates indefinitely.

    Would “mediocre” be too uncharitable a descriptor to apply to the quality of care one can expect under “single payer”? Literally, the “golden mean,” but “means” aren’t always “golden,” are they? This country is full of people who can, in their judgement, afford better than “mediocre” care, and are willing to pay for it. We can put most of the people covered under group plans in that category. They simply don’t share your enthusiasm for “equalization.” How do you propose to bring them to heel?

  33. “We know they’re up to something.”

    You obviously don’t know much about the health insurance business or what’s driving it. If you did, you would know that employers are finding health insurance increasingly unaffordable. More and more employers, including public sector employers, are shifting from fully insured risk based products to self-funded fee based plans. Self-funded plans use insurers for administrative services only and the insurers earn far less profit per member on those contracts than they do on fully insured plans.

    To further mitigate cost for the employer, we’re seeing insurance deductibles increase, more of the premium cost shifted to employees, greater acceptance of narrow networks and tiered networks as well as increasing interest in reference pricing. In the future, look for explosive growth in private exchanges for both retirees and active workers as employers move to a defined contribution model to bring more predictability to their health insurance costs just as 401-K plans largely replaced defined benefit pensions.

    The bottom line is that insurers have plenty of interest in reducing the cost of healthcare so health insurance doesn’t become completely unaffordable for their customers both in the employer market and the individual insurance market.

  34. I am hoping the likely 2014 electoral devastation for the Democrats will put fear in both party’s hearts.

  35. Insurers are parasites. I don’t know about you, but I’ll take that 1% rather than pay it to an insure-co in any form. We need to get the middle man out altogether..

    Non-profit in the insurance arena means that profits are sucked into CEO pay.

  36. Note to Archon:

    You are on the right track with your predictions.

    However I predict that the government will try and bribe insurers to stay on the Exchanges. Republicans have agreed to moves like this in the Medicare Advantage program, and would do so again I believe.

    Someone once quipped that Americans will spend any amount of money to prove we are not socialists. In this case, we will spend any amount of money not to have Single Payer.

  37. From my original comment for you, Mr Reading Comprehension Problem:

    “Feel bad for those who will now have to buy inscrutable HIX market “coverage” with and pay deductible amounts with after-tax dollars.”

  38. “Occupy Health Care Breaks out; profits with purpose sought. Income inequality in the U.S. will spill over into health care in 2014. The social media fueled visibility of earnings and executive compensation in every sector of health care will spark local political activism”

    We’ll see.



  39. “strut my access”?

    I was simply commenting inferentially on the convoluted injustice of it all. Quit reading stupid shit into it.

    “that Joe Sixpack doesn’t have the same access to.” You’re a real piece of work. “Aurthur,” whoever you are. I suppose you always forego any and all benefits you are otherwise lawfully entitled to in deference to others not getting a fair shake? Right?

    Spare me. Y’see, we can’t know who YOU are, with that untraceable screen name. But, keep digging, taking lame shots at others.

  40. I did mention I could be wrong. However, your post berates UHC’s practice of paying Mr. Hemsley for actually working (off point) as if it is somehow taking advantage of other people while you strut about with your access to some highfalutin spousal HSA that Joe Sixpack doesn’t have the same access to. Are you exploiting the HSA to avoid paying your fair share?

  41. But perhaps Helmsley’s $13.89 mil is his reward for having adroitly conspired with providers to inflate their fees for services, affording a seeming justification for jacking up premiums. We know they’re up to something.

  42. The excessive CEO compensation theme is getting a bit tiresome for two reasons. First, as I’ve noted before, if the 25 highest paid executive of every publicly traded health insurer all worked for free and the savings were used to reduce health insurance premiums, the premiums would fall by well under 1%. Second, most of the CEO’s compensation is not cash salary and bonus but stock options and restricted stock awards. These stock awards and options are paid for largely by shareholders in the form of earnings per share dilution whereas cash compensation is built into the price of the product.

    If you take a look at healthcare in Massachusetts, all of the insurers and almost all of the hospitals are non-profit yet per capita healthcare costs are the highest in the country. If you look at Minnesota, the insurers are all non-profit as are all or at least most of the hospitals and healthcare costs there are comparatively reasonable by national standards. I would suggest that the difference is largely attributable to more aggressive medical practice patterns in MA, many more expensive academic medical centers in the Boston region, and higher medical input costs. Insurer profits and CEO compensation are non-factors.

    Finally, the two market leaders in the Medicare Advantage space are UnitedHealth Group and Humana, both publicly traded for profit insurers. These try to price their Medicare Advantage plans to yield a 5% profit margin PRETAX or just over 3% after taxes. If you want health insurance to cost less then find sensible ways to reduce the cost of healthcare. Insurer profits and CEO compensation are not the culprits here.

  43. From your link citation:

    “However, if his wife is covered under the same plan and has no other coverage, she is eligible. She can set up an HSA in her own name, and because she’s covered by a family plan, she can contribute the full family maximum of $6,150 plus an additional $1,000 if she’s over 55. As a bonus, she can even use this money for her husband’s qualified expenses.”

    Nice try, “Aurthur” (and completely off-point to boot).

    Keep digging.

  44. Helmsley is a piker when it comes to obscene compensation. He’d be regarded as dirt under the heels of the top hedge fund guys.

    “Takers,” all of them.

  45. The political analysis is much less convoluted: How are middle class voters going to react to the discovery that their premiums are being jacked up to intolerable levels in order to reduce the premiums of others? This isn’t exactly what they were led to expect, is it? When Howard Dean begins squealing that the individual mandate isn’t necessary, we know that it’s becoming politically radioactive. And without myriads of Pajama Boys being herded into the exchanges, they become actuarially unsustainable. The insurers, no longer confronted by credible threats of “single payer” and “public option,” will begin to withdraw, dumping their policyholders. And the circle of fatuity will be complete.

  46. “the issue will be sticker shock in insurance premiums”

    Yeah. Premiums AND the annual deductibles, which used to come with what we called “catastrophic coverage.” I’m almost 68, a 99213, fairly healthy overall, on a couple of the usual generic maintenance meds for someone my age. I see my doc twice a year. Blood and urine draws annually. Unremarkable findings, everything well within normal ranges (albeit lipids and BP Rx-assisted). I wouldn’t even come close to spending a deductible. Two 99123 visits, one set of lab panels, and a couple of Rx’s — that’s all OOP now.

    While I’m a Medicare bene, I opted out of Part-B ’cause I’m on my wife’s coverage — high deductible with HSA.

    Feel bad for those who will now have to buy inscrutable HIX market “coverage” with and pay deductible amounts with after-tax dollars.

    UnitedHealthGroup CEO Helmsley was paid $13.89 million in 2012. That’s ~100x the average pay of a primary care doc, and about 250x the median U.S. civilian income.

    Joe Lunchbucket will have to continue to pay in order to help keep up this man’s lifestyle, courtesy of the PPACA.