Paul Krugman’s against it. At least I’m sure that what’s Karen Ignagni, Grace-Marie Turner at al are thinking….
HEALTH PLANS/POLICY: Well we know who’s side CMS is on!
CMS has decided that Medicare private plans are going to get higher rates this year despite the fact that many Congressional Democrats want to cut the rates they’re paid. There’s been a healthy debate on THCB in the last few days on whether or not these plans add much value (and to whom that value is added!). However, it does seem a bit crass for CMS to go an announced next years rates, when it’s clearly being changed in Congress as we speak. Even if they say “well it was Congressionally mandated” they too need to notice who’s running Congress these days.
HEALTH PLANS/POLICY: Lawmakers Should Not Reduce Funds for Medicare Advantage Program, apparently (with quick UPDATE)
Who says so? Well it’s the BCBSA CEO. Lucky that’s not self -serving or anything. Perhaps he’d like to explain how his members and the other health plans valiantly stayed in the Medicare market last time, took huge losses but stuck it out all the way to 2004 when rates were put back up. But this time they’ll quit instead. (BTW here’s the WSJ original to those of you with access)
After all, if we’re going to have revisionist history….
UPDATE: I was rushing to an interview (which you’ll hear tomorrow) so I didn’t get a chance to add one thing Mr Serota appears to have missed out in mentioning regarding the subject. Just like much of the American health care system Medicare Advantage is a good deal for its members, a great deal for its vendors (including but certainly not limited to the Blues) but not such a good deal (according to the CBO et al) for the poor saps who have to pay for it. And who would they be? Yup, it’s that taxpayer fellow again, and of course—due to the accounting and financing techniques of the con-artists who wrote the 2003 MMA, took us into Iraq et al—it’s also going to be paid for in the years to come by their children and grandchildren. But who cares about them when the Blues and other insurers are richer than they’ve ever been?
HEALTH PLANS: Bob Laszewski and me–right eventually?
Bob Laszewski and I have been continuing a dialog over whether Wall Street is smarter than us (obviously it’s richer than us) in ignoring the risk to health plans from the potential cuts in Medicare Advantage proposed by virtually every Democrat who matters. This continued into last week as despite a savaging of Medicare Advantage plans in a Congressional committee, Humana stock went up 5%. Humana is the biggest player in the Medicare private FFS market, which is most in the headlights of the Congressional Democrats since they noticed that it pays more than 12% more per enrollee than the regular FFS program.
But perhaps today the worm on Wall Street turneth. Most health plan stocks are down a few percent as one analyst at least was brave enough to downgrade the biggest of them (although his target price of UNH is still above where it is now!). We shall see.
PODCASTS/HEALTH PLANS/TECH: Interview with Stan Nowak, CEO of Silverlink
Here’s the transcript of my interview with Stan Nowak of Silverlink. The original audio is here.
Matthew Holt: Hi, it’s Mathew Holt of THCB and I’m back with another podcast. And this time I am talking with Stan Nowak, who is the CEO and President of Silverlink. You may not be familiar with Silverlink; they are a company that relatively new and relatively small. But they have a big client base doing, primarily outbound automated phone calls. We spend a lot of time on THCB talking about the Internet, the web, Health 2.0, and all these kind of new ways that people are using computer technology to communicate with each other. But what we obviously we don’t realize, well we do realize but don’t think much about it, is that in healthcare; a lot of the activity is in phone calls. And there is a big market in trying to do the phone call better and to gain more information from that.So, I chatted with Stan a couple of week back and I thought it would be interesting have him on a podcast because Silverlink has introduced some new initiatives. But they also have been doing a lot of stuff that probably is not familiar with people. It has sort of been under the radar, both in terms of working for PBMs if you have Medicare Part D and working with many health plans. So, first off, Stan, good afternoon. How are you doing?
POLICY/HEALTH PLANS: Has George changed his tune?
Found this Interview with KP CEO George Halvorson put out in January. Here he is talking about single payer
PwC: Are there other practices you see overseas that you think are importable?George Halvorson: One of the nice things about almost every other country, particularly the ones with single-payer systems, is that they focus very heavily on primary care. Most health-care costs come from a very small number of people: 1% of the population represent 40% of the costs; 10% of the people represent 80% of the costs, etc. So the largest potential you have for changing the total cost of health care is to focus on that small group of people and take care of them appropriately. And the only really effective way to focus on those people is with primary care. You need to intervene medically with those people before diseases progress to the point where they’re extremely expensive. And that requires a primary-care model.Countries with single-payer systems all have put in place extensive primary care, and employ much less expensive specialty, secondary and tertiary care. That’s actually not a bad model, because what you end up with is fewer people needing a heart transplant. If you need a heart transplant, you may be less likely to get it in those other countries. But if you have really good primary care, you’re much less likely to actually need the heart treatment.PwC: Does that mean there are trade-offs regarding care?George Halvorson: Only if you have to decide where you’re going to invest. If you decide to invest in the primary care part of the equation, then you eliminate the need for some of those very expensive treatments. On the other hand, if you don’t invest in the prevention part of the agenda, then you have to invest much more heavily on the tertiary side of the equation. It’s a cost trade-off for the system. For the patient, think of the quality-of-life perspective: Would you rather have a massive heart attack, or would you rather be treated by a primary care doctor? It makes more sense to focus on early prevention and not on the tertiary care rescue model.
It’s a sensible and pretty accurate description. But that’s not exactly the terms he was using about single payer more recently at the Commonwealth Club when his description of single payer used the terms “rationing”, “Canadians coming to the US” and he alluded to single payer being like the prison health care system. I wonder what changed his tune? Was his body invaded a la Harry Potter movies by Sally Pipes?
PODCASTS/HEALTH PLANS/TECH: Interview with Stan Nowak, CEO of Silverlink
Stan Nowak is President and CEO of Silverlink which does automated phone calls on behalf of health plans. It’s a lot more complex and much more interesting than you might think, and it really is closing the loop for those health care consumers who don’t use the web. Plus Stan is an interesting and fun guy, even though he had to suffer through that awful Cambridge, Mass based business school!
Listen to the podcast. The transcript will be up in a few days.
HEALTH PLANS/POLICY: Individual association problems
Nothing really new here, but a nice piece from Lisa Girion in the LA Times about how because of the haste of insurers to avoid association groups and insure the young healthies, said groups are going into death spirals. And of course being kicked out by their plans if they can possibly figure out a reason in the fine print to do so. Today’s bete noir is Blue Shield of California which is kicking out the Association of Realtors on a technicality, but they’re obviously all at it.
Which of course means that if you’re in one of those association groups and yours get terminated and you’re sick, you’re screwed. I thank my lucky stars that when this happened to me, I was able to fool one plan into thinking that I’m healthy enough to be worth having. So far, one year later I have no claims, so they’re up!
HEALTH PLANS: KP’s Halvorson talks–Merlin responds,and I comment
Things Halvorson said….
In his remarks to (video, no transcript yet) The Commonwealth Club as interviewed by Chris Rauber, who was being rather too nice—although that’s mostly the fault of the stupid written Q&A format the Commonwealth Club uses (You’d think that something vaguely modeled on the UK system would grok the concept of a follow-up question), KP CEO George Halvorson said a few interesting things:
“One of the things we need in American health care is an extremely high level of transparency” (more on that later George!)
“Any time you get to a pure single payer system you get a health care system that rations <snip> if you want a good look at single payer look at the medical systems in our prisons.” I agree with him in his specifics about transparency and how it would be better to have a system with providers competing properly with better information, but with that type of rhetoric is his next job at NCPA or at PRI? C’mon George! Every health care system rations—something John Goodman is actually right about. The question is, how is it done? Just accusing single payer systems of rationing and actually bringing up the erroneous bogeyman of Canadian patients crossing the border puts Halvorson in a camp of wingnuts with whom he ought not to be associating himself.
And as for that transplant program. “It was an excellent program” but on the administration of the list “we just screwed up.” Methinks that David Merlin, the fired administrator of that program and the source of the LA Times story does not agree. Here’s what he said in response in a letter to the SF Business Times today:
Whistleblower: Kaiser’s kidney ills not tied to CEO’s absenceAs the person who exposed the Kaiser kidney transplant program tragedy to state and federal officials and the media, I¹m certain the majority of Kaiser kidney patients are as insulted as I by George Halvorson¹s attempt to portray KP¹s unwillingness to speak up and/or take responsibility due to his six-week absence. KP¹s transplant program had been in operation over 18 months prior to his hospitalization in April 2006. The massive clinical and administrative failures had been identified by Kaiser senior officials long before this. Around May of 2005, a majority of the 48 northern California Kaiser nephrologists (kidney specialists) called an emergency meeting of senior KP physicians (including Robbie Pearl, M.D., CEO of the 6,000 member TPMG physician group) and demanded the fledgling Kaiser kidney program be shut down due to overwhelming concerns of patient neglect and associated health issues and that all 2000-plus patients be sent back to UCSF and UC-Davis Medical Centers.These problems didn’t suddenly surface at the time Halvorson became ill. His comment that the kidney crisis was kept from him during his six-week recuperation rings hollow and his assertion that United Network for Organ Sharing thought Kaiser was transferring one patient, and not 2,000, is both ridiculous and irrelevant. Kaiser (TPMG) doctors were responsible for the day-to-day care of these patients, not UNOS.Kaiser has attempted to portray their internal problems as administrative issues, but as an experienced health-care administrator who personally witnessed the internal operations, I can tell you with certainty the problems stemmed from clinical issues due to inadequate staffing of properly trained physicians and nurses and the personal in-fighting between Kaiser transplant surgeons and transplant nephrologists.Kaiser violated the covenant of public trust between patients and physicians. Thousands of real people endured unnecessary pain and others suffered unnecessary death. In health care, the unnecessary death of a patient is the strongest indicator of quality of care or in Kaiser’s case, lack of care. It doesn’t get any more clinical than that.David MerlinFormer director, Kaiser Kidney Transplant Program San Francisco
It’s worth saying again that the crux of this whole thing is not only was there a screw-up of huge proportions on the UNOS-Kaiser hand-off, but there is the strong suspicion–highlighted by what Merlin says and intensified by Halvorson boasting about the successful outcomes of the transplants that were done–that the KP surgeons were cherry-picking their cases and leaving the marginal ones on the waiting list (if indeed they ever got onto the "new" waiting list). If the meeting between the nephrologists and the senior Permanente staff Merlin talks about took place, you can bet that that was at least one topic of conversation.
HEALTH PLANS/CONSUMERS/POLICY: Administrative costs–bad and will get worse with CDHPs
PNC Bank has a new survey out saying that 30% of all health care costs are to do with administration—actually it may be more than that if you believe the study in Health Affairs that said it was 20-22% of all provider costs, when the public provider payer segment is keeping an additional 3–20% of all the dollars too. I think that PNC is trying to promote HSAs et al, and perhaps wants to suggest that this will solve the administration problem. As I’ve been saying for a while, the current set up of CHDPs just means that instead of chasing down health plans for the money, providers will be turned into consumer collection agencies.
And PNCs own survey shows that most providers agree with me:
Nearly three-quarters of hospital executives surveyed (72 percent) expect high deductible health plans, which require consumers to pay more upfront costs for care out of their own pockets, to add another layer of complexity to the claims, billing and payment process.
