Category: Uncategorized

HEALTH PLANS/POLICY: Sierra– a case study of needed insurance reforms

Mar 8, 2007• 1

Now and again there’s a real world case that reminds you why the only solution for keeping private health plans is managed competition, with the emphasis on managed. Remember as you read this story that Alain Enthoven always said that there should be community rating, with standardized benefits between plans and risk adjustment between them to override the impact of chance-driven uneven risk selection.

So the story (hat-tip to Rick Byrne for this) begins with Part D, which allows significant disparity in benefits between plans—something that it’s claimed causes few problems for enrollees. What happens next is that one plan with particularly rich benefits finds that it is adversely selected against. But this doesn’t become clear until late in 2006. Meanwhile Sierra Health Services, a Nevada based for-profit HMO with a pretty good record at cost containment, thinks that it can launch a PDP (stand alone drug plan) that covers the donut hole and has rich benefits. It has to file the paper-work by mid-2006, it charges a hefty premium and it waits for the money to roll in. 42,000 seniors sign up.

POLICY: Massachusetts Health Plan Update By Eric Novack

Mar 8, 2007• 4

Those of following along with the attempts to provide comprehensive health insurance under current market conditions in Massachusetts under the ‘Connector’ concept, are aware that former Governor Romney and the legislature was aiming for an average policy to cost $200 per month. Never mind that the average policy up to this point in Massachusetts was over about $420 per month.

Well, Governor Romney is out and the first round of bids came in, averaging $380 per month. Shocking.

So new Governor Patrick and the health commission sent the insurers back to the drawing board to see what round 2 would bring, even considering proposals that might limit or exclude prescription drugs.

Last week, the Governor and the Boston Globe presented a breakthrough. To read the headlines, you would think that success had been achieved.

But wait, get to paragraph 10. The average plan now is $305 per month. A significant improvement, to be sure, but hardly what Partners Health Care CEO called being “back in the ballpark”. The $305 rate is still 50% higher than what was intended, and we really do not know exactly what restrictions are being placed to get the lower rates. And just wait until the purchasers of the new plans start bumping into the restrictions.

Other criticisms about the plan have been chronicled here and elsewhere before and again.

Prediction: By New Year’s 2008, few will be happy to claim ownership of the Massachusetts Health Plan—other than the appointed bureaucrats and their minions.

POLICY/QUALITY/HOSPITALS: Keynsian reporting trumps Smith-ian invisibilty

Mar 7, 2007• 2

Michael Cannon at Cato picks up on David Leonhardt’s NYT article about error/process reporting in hospitals and suggests that there’s no need for regulation, as the market is getting us there already.

Hmm… methinks Michael underestimates what one economist he does approve of suggests identifies as a major problem. People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices” He may think that this has only been going on since 2002 or thereabouts but Codman was trying and failing to get transparency in hospitals in 1910! If we’re going to wait for the industry to really do this by itself to respond to Smith’s invisible hand, then as an economist Michael probably doesn’t have quite such a high regard for once said, in the long run, we are all dead!. Codman certainly has been pushing up daisies for a more than 60 years.

CONSUMERS/TECH: Interesting online/offline collaboration

Mar 7, 2007

This is an interesting online/offline collaboration between Carepages, which lets patients create websites and Sharedbook, which now allows them to be published in book form.

POLICY: Can Americans Learn From History? (book)

Mar 7, 2007

The answer is only if they read the book—so unlikely! I of course haven’t read this book but Matt Guidin at F&S tells me it’s good. Here’s the review from ex RWJ Prez Steve Schroeder.

TECH: AHRQ to the rescue

Mar 6, 2007

My crack sources tell me that you can soon get your fill of webinars from AHRQ on matters near and dear to a HC IT wonks heart. On Mar 15 there’s a webinar about Model Contract Language for Health Information Exchange. On Mar 28 there’s a webinar about (get this mouthful) the Socio-technical Aspects of Health IT and on April 10, there’s a webinar about the Massachusetts eHealth Evaluation (starring David Bates). If that lot doesn’t get you going, then nothing will!

POLICY/PHYSICIANS: Reducing waste in US health care systems, by Walter Bradley

Mar 6, 2007• 3

Walter Bradley is the Chairman of the Department of Neurology at the school of Medicine at the University of Miami. Previously on TCHB he wrote a piece on how we should solve the uninsurance problem. Today he takes aim at waste reduction.

R.W.Bush published a paper entitled “Reducing Waste in US Health Care Systems” in the current issue of JAMA (subscription boringly required). In this, he describes the application of the Lean Production methods of Toyota to eliminate waste. In this context, “lean” is “any activity that does not serve the valid requirements of the customer.” This approach is innovative and he was able to demonstrate that improving efficiency saved money, improved patient care and made the system more “user-friendly.” Waste is undoubtedly one of the elements involved in over-utilization that leads to the high cost of US health care. Others elements that have been suggested to be responsible for the US expending the highest proportion of GDP on health care of all nations in the world include bureaucracy and administration, malpractice insurance and defensive medicine, and the high cost of goods and salaries of health care workers.

POLICY/QUALITY: Why does Health Care in the USA cost so much? Over-utilization is an important factor by Walter Bradley

Mar 6, 2007• 2

Walter Bradley has not only written the shorter piece today, but has sent me a longer piece citing over-utilization as a cause of high health care costs in the US. I’m inclined to agree with him even if Anderson doesn’t. It’s a longer more academic piece and I’ve buried most of it behind the fold.

Introduction

The United States (US) invests a higher proportion of gross domestic product (GDP) on health care than all other developed countries, despite which the US population suffers poorer access, a higher individual financial burden, inefficient care and a higher medical error rate than people in most other developed countries.

PODCAST/CONSUMERS/TECH: HealthFacts

Mar 6, 2007• 1

BCBS of Minnesota has set up an interesting approach to transparency and measuring provider performance. They’ve created a site called HealthCareFacts.org for consumers to look at and compare provider details, set up a subsidiary called Consumer Aware to run it, and are now marketing it to the world. The model is nutritional labeling. I met Amelia Schultz (the VP of Sales at Consumer Aware) and she set up this interview with founder and CEO MaryAnn Stump. (The interview was recorded on Feb 14, but posting was delayed because I had to fix some technical problems with it. All better now, I hope!)

POLICY: A National Disgrace By John Irvine

Mar 5, 2007• 11

When the story first came out, it didn’t look like much.
Just a few problems that needed correction: a little mold here, a few repairs
there, the inevitable complaints from disgruntled patients. But two and a half
weeks after the Washington Post ran a little story by reporters Dana Priest and
Anne Hull titled “Soldiers Face Neglect, Frustration At Army’s Top Medical
Facility“ the Walter Reed scandal has become without question the top story in the country.

Today, Priest and Hull return with another lengthy piece examining
conditions in the military healthcare system in other parts of the country titled
“Walter Reed Not an isolated case.” The two reporters say that after their initial story ran they were contacted by "literally hundreds of soldiers" from around the
country with similar stories to share. The pair writes:

Nearly 4,000
outpatients are currently in the military’s Medical Holding or Medical Holdover
companies, which oversee the wounded. Soldiers and veterans report bureaucratic
disarray similar to Walter Reed’s: indifferent, untrained staff; lost
paperwork; medical appointments that drop from the computers; and long waits
for consultations.

That appears to answer a question that many people had been wondering about. As New York Democrat Charles Schumer put it over the weekend “if it’s
this bad at the outpatient facilities at Walter Reed, how is it in the rest of the country?” On Sunday,
Schumer called for a bipartisan commission – possibly to be headed by former
secretary of state Colin Powell – to examine conditions facing returning
service men and women.

Predictably, conservative critics around the blogosphere are
pointing at the debacle as evidence that any government run healthcare system
would be a disaster. Kevin MD writes: “What’s happening at Walter Reed is small
sample of how government-run health care would turn out. Does the public understand
the implications of a nationally-run health care system?”

"Will the Bush-bashers join with free-market critics to effect real change and
help the troops who need and deserve better care? We’ll see," writes Michelle Malkin.