What are people saying about health reform beyond the beltway and outside the health wonk debates? I’ve been meeting with Rotary Clubs and local Chambers of Commerce during the last several months, and they’re talking about different issues than the ones being debated in Washington, DC. When I talk with these groups about the prospects for national health reform, what are the top three questions they ask?
Is this going to lead to a single-payer system with rationing, just like they have in Canada?
Why isn’t the malpractice problem being addressed?
Will this include illegal immigrants?
These are not the top issues being debated on Capitol Hill. If you just read Politico.com, the Washington Post, and the pundits’ blogs, you would think that the big issues are the public plan option, the employer mandate, and the cap on the tax exclusion of employer-paid benefits. There are important, but they aren’t the issues that most small employers and consumers are worried about.Continue reading…
Timing matters. The health industry has demonstrated steadfast
resistance to reforms, but its recently diminished fortunes offer the Obama
Administration an unprecedented opportunity to achieve meaningful change. The
stakes are high, though. The Administration’s health team must not miscalculate
the industry’s goals, or waver from goals that are in the nation’s interest.
The two are very different.
Several blog readers have asked me to take a fresh look at all the
organizations related to ARRA and explain how it all works. Here's my
understanding:Office of the National CoordinatorThe
Obama administration's ONC is different from the Bush administration's
ONC in several ways. It's now funded with $2 billion to accelerate
healthcare IT adoption. Its new leader, Dr. David Blumenthal has a
policy focus, so we'll see broad policy guidance and specific
healthcare outcome goals rather than technology for technology's sake.
It has regulation – ARRA is law and there are several new privacy,
standards, and implementation requirements that were only voluntary or
market-driven previously. You can expect that ONC will have a major
role in coordinating federal agencies' use of healthcare IT as well as
adoption in the private sector. By controlling the definition of
meaningful use of healthcare IT as the gatekeeping function for paying
stimulus dollars to clinicians, ONC has real power.
Last week’s White House meeting on health care reform re-floated the idea of taxing employer-provided health benefits to help pay for insuring the uninsured. Sen. Max Baucus (D-MT), chairman of the powerhouse Senate Finance Committee, told reporters after the meeting that the president “might consider” taxing some employer-provided benefits, even though President Obama “‘made it very clear’ that he preferred his own revenue proposals,” according to the New York Times.
The idea of taxing health benefits has drawn strong support from many progressives. Eyeing the potential to raise $680 billion in revenue over five years (the health benefits tax exclusion now dwarfs the home mortgage deduction, whose repeal would only raise $444 billion over the same period), the liberal Center for Budget and Policy Priorities issued a new report calling for limiting the health care exclusion because “universal coverage may be out of reach otherwise.” Jon Cohn, writing in his debut Kaiser Health News, column, endorsed the idea earlier this week with a slap at unionized workers “whose employers give them blue-chip coverage.”
But are there really a lot of Cadillac plans out there? That gratuitous slap ignores the reality of today’s insurance marketplace. Employer-based plans pool risk for members of that plan only. Whom do you think has the high-cost “blue-chip” health insurance coverage — a newly opened, foreign-owned auto assembly whose average employee is 35 years old and has been hired because of his perfect health, or a General Motors plant whose average worker is 55 and has suffered through the stress of multiple layoffs and multiple plant closing threats over the past two decades? The only thing “Cadillac” in the health insurance costs of that GM worker is the nameplate of the car rolling off the assembly line. His higher premiums are a direct function of he and his co-workers’ higher claims, not more generous benefits.
In pushing for removing the tax deduction, the CBPP report at least pointed to the necessary adjustments that would have to occur to make the new tax truly progressive. High-cost groups would have to be protected by not allowing insurance companies to set higher prices based on either an employer’s size (thus protecting small business, which usually has higher rates because of higher administrative costs) or the health status of a firm’s employees. This is called community rating, which can only be enforced by a strong regulator.
The exclusion’s removal would also have to take geographical variation into account. Making the insured pay higher taxes because they live in areas with high health care costs punishes the victim, not the beneficiaries of those higher health care expenses, which are hospitals, physicians and medical suppliers who collect the fees for the often useless procedures offered in high-cost areas.
The idea of removing the income tax deduction as a way of raising revenue for insuring the uninsured has just one compelling argument behind it. It’s a form of progressive taxation. Because tax rates are higher on higher income, the tax exclusion for health benefits is much more valuable to high-income employees than low-income employees. Removing the exclusion only for those with high incomes would amount to a progressive redistribution of income from the upper class to the working class, good economics because of the unequal distribution of income in our society, but very bad politics. Taxing the rich to pay for a new entitlement — universal health care — may appeal to liberals and the left, but can be easily attacked by opponents of reform.
Indeed, couple its redistribution effects with the likelihood that Congress will be reluctant to impose tight regulation of the insurance industry and cost-control measures to offset geographic variation, repealing the health benefits tax exclusion could engender an angry backlash from already insured workers. I can already see the next round of Harry and Louise commercials, funded by opponents of reform. The 85 percent of working Americans who are privately insured will be told ad nauseum that the only benefit they’re going to get from health care reform is a higher tax bill on top of their already skyrocketing co-pays and deductibles.
What a difference a few years makes. Michael Porter is the Harvard Business School prof who charged into health care a few years back. He (with Elizabeth Teisberg) wrote a book called Redefining Health Care which suggested how all kinds of changes on the delivery side of health care would solve all of our problems. Those changes were not exactly secrets to people who, say, read Michael Millenson’s Demanding Medical Excellence—a much better book written ten years earlier which explained why radical change on the delivery system side wasn’t going to happen. The answer?
Our friends over at American Well have two announcements today. First, they’re releasing what they call Online Care Insight, which is essentially the integration of care guidelines into their online care system. We saw a glimpse into this at the Health 2.0 Hawaii chapter meeting last March (sorry if you weren’t there!). Essentially this is a decision support service that helps physicians figure out if the online visit in front of them is appropriate for online care, and then offers clinical decision support during the visit (such as medication reminders, gaps in care, and other alerts)
The second piece of news is that American Well and Optum Health will be combining the American Well online visit service with Optum’s eSync care management platform. eSync basically integrates the data analytics portion with care management, so that a plan or employer can figure out who’s got what dread disease and reach out to them using a series of different contacts. Usually this means email, or nurse or health coach call. Now an online physician visit is part of that continuum.
(Optum Health is a subsidiary of United HealthGroup, and eSync was introduced at a sponsored Deep Dive at the recent Health 2.0 Meets Ix conference. FD Both American Well and Optum have sponsored the Health 2.0 Conference).
Obviously given United’s scale & Optum’s reach into the self-funded employer market this is big news for American Well and online care. The press release also says that the service will be available to individual consumers. I assume that this means that some part of United’s multi-state physician network will be on the system, and that there’ll be an option for consumers who are not in a United plan to access it. If it does mean that, then when this is launched the American Well service will essentially be available nationwide. But that’s my early morning speculation. I’ll try to track down someone from American Well to get more accurate details.
So Blue Shield of California wins the first case it’s fighting over the recission issue. But it’s in very strange circumstances. The plaintiffs (a couple trying to get coverage for a doctor they like that wasn't in their employer’s plan) changed their story and said that they had lied on their application.
Blue Shield’s lawyer even went after St. Lisa herself!
Blue Shield's lawyer, Jacobs, also complained about "unrelenting negative coverage in the Los Angeles Times." Despite that, he said, "we fought this lawsuit because we knew we had behaved properly and we were confident that the evidence would speak for itself. It has."
So four burning questions remain.
1. Why did the couple who’ve been fighting this all the way, suddenly capitulate when not significantly different circumstances in the only other case to go to arbitration (the Healthnet case) led to a $9m verdict? Something happened here and in the interests of transparency Blue Shield had better tell, or suspicions will be raised.
2. If it’s so sure that it’s legally in the right, why did Blue Shield settle with the state insurance commissioner earlier this year (albeit on pretty favorable terms) and pay the out of pocket expenses and offer insurance to the 678 people with claims against it? If you’re in the right (and legally I think they may be in many of those cases), why be expedient?
The AP has a puff piece on the greatness of Karen Ignagni. Well greatness if greatness is defined as doing anything it takes to screw the nation on behalf of her organization’s members, all the while telling bold face lies about their activities. But the lies of Karen Ignagni have been well documented here on THCB and we don’t need to rehash them now.
But then the AP reporter Erica Werner quotes Uwe Reinhardt and has this somewhat remarkable passage:
"Whatever AHIP pays her, it's not enough. She's unbelievably effective," said Princeton economist Uwe Reinhardt. "It's just amazing what she's achieved for them against all odds." Ignagni's total compensation, according to AHIP's most recent filing from 2007, was $1.58 million, which includes $700,000 in base salary, $370,000 in deferred compensation and a bonus. Ignagni won't say how many hours a week she works. The number's so high it's embarrassing, she said.
Among successes cited by Reinhardt and others is helping persuade the Bush administration to develop private insurance plans within Medicare that are producing unexpectedly high payments for private insurers. When Congress was considering expanding a children's health insurance program in 2007 by taking money from the private Medicare Advantage plans, Ignagni worked successfully to stop it. Those private plans are being targeted again by Obama, who wants to squeeze them to pay for his health care agenda. Ignagni's industry group is organizing older people to defend the plans.
There’s lots of more puffery about how she’s good at building consensus among the diverse interests in her group. My take on that is “we’ll see”.
First KP somehow gets landed with the Octomum, whom they most surely didn’t provided with the IVF in the first place. My assumption is that the multiple birth cost them into the middling 6 figures.
Now because a rogue employee released some of the Octomum’s records, they get hit with another $250K fine! I felt KP made a little too much fuss at the time about their services (the press conference crowing about the birth was a little much). But this is now an example of good deeds getting multiply punished….
Kaiser Permanente has released a study from its EMR database looking at use of vaccines in its Colorado region. KP in Colorado has data on about 480,000 members dating back to the mid-1990s from when they started implementing the first EMR. After that system was retired and they moved to Epic the old data is in PDF format for current records, but is also in a database for research use. I spoke to the researchers Jason Glanz & Ted Palen from the KP Colorado Institute for Health Research late last week.