Here’s my comment on a recent Health Affairs blog post from Heritage’s Nina Owcharenko whining about the ACA as a g’vermint takeover.I wrote “I’m really pissing myself about this one. Only in the bizzarro world of American politics can the nutjobs on the right, and not just any nutjobs but on the right but Nina’s actual colleagues at Heritage design the basics of a health care policy and then declare it something that’s antithetical to their very being. Furthermore, it’s only in bizzarro world of American politics that a massive expansion of PRIVATE health insurance legislated in the ACA is called a government takeover, or in Nina’s words puts the “trend toward government-based coverage on the fast track”. If Nina had bothered to check she’d realize that the vast majority of Medicaid enrollees — 66% according to KFF– are in private plans and the rest are being moved there. Yet this is another expansion of government!” Of course if you look at the Health Affairs version where they moderate comments, you’ll note that some of the words I wrote and the words they publish are slightly different
Wendell Potter reveals Rick Perry’s ignorance
What does a know-nothing Republican who doesn’t believe in science and is front-runner for his party’s nomination for President say about health care? Pretty much the same that the rest of them now do–unlike McCain, Huckabee et al in 2008. What’s the new Republican ideology? Apparently. there’s not much wrong with health care and what there is wrong, caps on malpractice payouts will fix. Perry cites the increase in the number of doctors in Texas since tort reform caps were put in as proof that it works. Wendell Potter at PR Watch shows that, when corrected with facts, everything Perry says is rubbish. But then again, were you surprised?
Aiming developers at the insurance market?
It’s hard to think of a more opaque market than that for individual health insurance. But perhaps there’s enough data that can be reworked so that ordinary people can get a better understanding of it. Todd Park, HHS’ CTO, for sure thinks so, and just last week arranged (as in he said in this blog post) to allow developers to download files with data from all the markets in all 50 states & DC. My hope is that this will inspire people like eHealthInsurance.com to put the most important part of any plan comparison (out of pocket maximums) front and center on their plan comparison tools. Otherwise, I may just have to build my own….
Rich hospital buys poor Medicaid Health plan. Hmm
Partners, the Boston behemoth that rivals California’s Sutter Health for its ability to impose its pricing will on the local Blues plans, has bought a struggling Medicaid plan, Neighborhood Health Plan (NHP). Actually “bought” is a strong word, as it’s like one of those deals when you “buy” someone’s car by taking over the payments they can’t meet. The fascinating part is that Partners has agreed to fund 50 community clinics that provide most of the care for the Medicaid crowd that NHP insures. So is Partners’ goal to ramp those clinics up to its standard level of pricing and charge Medicaid–i.e. the state & Feds-more for the privilege? Or is the goal (as Jeff Goldsmith suggested more generally yesterday) to import the knowledge those clinics have and get the rest of the system to run at their low cost? You be the judge…
The bleak state of the (health care) economy
Health care spending increased at 3.9%, its slowest rate for decades in 2010 following a slowdown in 2009. Merill Goozner has the play by play but it’s clear that the numbers are starting to reflect what Jeff Goldsmith said in his keynote at Health 2.0 last year.–even the health care industry can not grow geometrically forever.
But there’s something hiding in these data. Recently I gave an update for a talk that I’d given 15 years before at the Oregon Medical Association. I reviewed the 2010 year forecast I did for IFTF in 1997 and I was struck by how in our scenarios we had overestimated the per capita spend on health care, but underestimated its share of GDP. That meant while overall health spending didn’t grow as fast over the decade as we’d forecast, the economy grew much slower. And of course the big jumps in health care as share of GDP that we saw in 1991-4 and 2007-9 came when the economy tanked
As we enter the 7th year of our lost decade with the stock market starting to predict a double dip recession, and real unemployment in the high teens, we face the prospect of getting to 20% of the GDP going to health care via not a boom in spending brought on by the ACA or a rich economy making rational choices, but by default. Of course these days the loonies in the Tea Party are reminding us of the other meaning of the word default!
As if we needed further proof…
This weekend tells us three things. One, American government is beyond broken. In this completely artificial debate, a minority opinion that after all represents a minority of the opinions of a party that only controls one third of the government dictates the terms of the deficit reduction compromise. A compromise that is pure fantasy anyway. Two, no one in DC gives a shit about the economy and particularly no one cares the lowest 30% of Americans who are un- or marginally employed or relying on support from society. We heard nary a peep even from any Democrats about them as we insanely cut spending in the middle of a recession. It’s 1937 all over again. Third, health care is for sure a government business, according to Wall Street, with the stocks of most major insurers and hospitals off 5-10% this morning on fears of cuts in Medicare.
What’s the next way PBMs will make money?
Yesterday Medco offered itself up to smaller competitor Express Scripts, creating an entity with more than 50% of the PBM market. PBMs originated as specialized claims processors that supposedly were able to reduce drug costs. But in the 1990s drug costs soared. Somehow PBMs didn’t lose employer clients, further confirming that employers are dumb about how they buy health care. Most employers didn’t understand that PBMs made much of their profits on rebates they were paid by drug companies to keep particular drugs on formulary. Almost none of that money went back to the employer. After that game ended, PBMs replaced almost all those profits by making huge margins on generics until Walmart showed that it could make a profit by charging only $4 a fill. Now it looks like extracting a bigger piece of the pie from pharmacies and charging more to employers may be the only game left for PBMs. And that’s probably the driver behind the merger.
Deficit talks & phone hacking
Over at Managed Care Matters Joe Paduda makes the outrageous allegation that because the current Republican leadership all voted for the Medicare Modernization Act, (not to mention our adventure in the desert and the tax cuts last decade) they bear some responsibility for the current deficit. One wonders why the Democrats aren’t using this information and explaining it to the public instead of bending over and grabbing both ankles/adopting a position to the right of average Republicans! I’ve now figured it out. Joe must have obtained this information by phone hacking and because it was obtained illegally, Obama and co are honor bound not to use it!
The Federal Exchange–Lost in alternate history
The next few days will be all about exchanges, or more accurately the “American Health Benefit Exchanges for Individuals and Small Business Health Options Program.” Tim Jost has a long and excellent article at Health Affairs blog explaining them, and–Yikes!–it’s the first of three. There’s going to be different rules for individuals versus small businesses, and of course differences as to whether Medicaid plans (which will cover more poor individuals) will be part of the exchange. For states that decide not to implement the exchange themselves, it’ll be done by the Feds–assuming that the whole thing doesn’t get repealed (and it won’t). But I remain very concerned that the complexity of 50 different exchanges, not to mention the ability of HHS to really keep an eye on all of them, is a problem–one that would be much reduced with a single Federal Exchange looking something like FEBHP. As Jost says, The Senate version of the ACA which became law (in contrast to the House version which did not) creates the exchanges at the state rather than the federal level. For that we have Scotty Brown and the voters of Massachusetts to blame. And thus the weirdness of the American political system has given us a long series of headaches for years to come.
Interview: Insurance exchanges, ACOs? ACS tells you how…
We’ve been digging under the hood a little of Xerox since (much to my surprise) they started sponsoring THCB recently. The reason Xerox cares about health care is related to their purchase of ACS a couple of years back. ACS was best known for government (mostly Medicaid) claims processing but they also had a whole lot of other technologies and capabilities. One of those is actually running the Health Insurance Exchanges that are going to be in every state (or imposed on the states in 2013 if they’re not ready). Another ACS capability is working with incipient ACOs, or providers that backdoor into ACOs via Medicare Advantage or direct deals with private plans.
Last month I spoke with Michael Sandwith who runs Market Management at ACS. Why should a state or a provider use ACS to put the systems together to run health information exchanges or ACO information capture and management systems? Mike’s logic is simple–because they’ve done it before. They’re operating 7 state HIEs already and aren’t just bringing Powerpoint. And can ACOs work given the failure of PHOs in the 1990s? It all depends if we can independently manage the physicians within the system–i.e. don’t let the hospital management screw it up! Here’s the full video interview of someone who’s been there in two of the bigger health care IT challenges of the day.
