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Tag: Joe Flower

What About Personal Responsibility?

A reader writes to ask: What about personal responsibility? “I see no movement afoot to require the public to accept or meet norms of behavior that would reduce the need for medical treatment—smoking, excess drinking, use of drugs, over weight, etc. What ever happened to ‘You reap what you sow’?”

Good question. I answered:

Thanks for writing. This is a common concern. It’s often expressed something like, “Why are we paying for all this healthcare for people who won’t take care of themselves?” This seems, at first blush, an obvious question with an obvious answer. After all, as I constantly point out in what you read, vast amounts of healthcare dollars are spent to correct what we might call “self-inflicted lifestyle damage.” Why should the rest of us pay for that? Where is the responsibility?

On inspection, the question is more complex and the answer is not so obvious. Let me try to parse it out. I can think of four related aspects of the question.

1. Their health affects ours. My wife and I had a lovely dinner at a very nice French restaurant on the waterfront here in Sausalito last night. The staff was all French, with those endearing accents. The busboy who set our table, poured the water, took away dirty plates and all that, was Mexican. I talked with him a bit in Spanish about the nice weather. I have no way of knowing his immigration status. Now, if I had my ‘druthers, just as a customer, would I rather that he have good access to healthcare and healthcare advice, be up on his flu vaccinations, be aware of the importance of washing his hands frequently, or would I rather he be a seething mass of communicable disease, compounded by ignorance?

 

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Coordinating Care: It’s A Moral Question, But Not A Hard One

Under the headline, “Medicare Plan for Payments Irks Hospitals,” today’s New York Times details the opposition stirred up by the government’s “value-based purchasing” initiative. If you’re buying anything (and the US federal government is the largest purchaser of healthcare in the world), on what basis other than value would you want to buy?

The measure at issue is “Medicare spending per beneficiary” during hospitalization, and in the 3 days before and 90 days after. The hospitals and hospital associations that are complaining have, mostly, two beefs: “Our patients are sicker,” and “We can’t be responsible for what happens, and what tests and procedures doctors order, outside our walls.”

The government’s response to the first is that the system will be adjusted for older populations, more acuity, and other variables. The response to the second is more complex, but it amounts to: “Work it out.”

And there is good reason for this. In studies going back two decades, the Dartmouth Group has shown wide disparities in Medicare payments per beneficiary between regions and between hospitals. A recent Institute of Medicine study took the Dartmouth stats and, in response to all the talk from hospitals that “our patients are sicker,” or “but we have to pay for teaching and research,” re-worked them to back out all those confounding factors. The Dartmouth Group’s study showed that the most expensive areas spent three times as much as the least expensive. After the IOM backed out the confounding factors, the data still showed that the more expensive areas spent twice as much.  And the expense does not vary so much with inner-city status or number of illegal aliens as it does with whether health care in a given area is well-organized and coordinated or unorganized and fractured. It’s a really easy pattern to see if you stare at the maps of expense long enough, and know a lot about different healthcare markets.Continue reading…

How to Blow the Big One: A Methodology

[Note to the reader: Anything that is in italics and square brackets (such as this note) is addressed to you, personally. Yes, you. Try it on, see if it fits.]

Healthcare has, right now, the greatest opportunity we have seen in our lifetimes to make a big change, to rebuild itself in a hundred ways to become better for everyone, and cheaper—to get cheaper by getting better. We’re not talking “bending the cost curve,” cutting a few points off the inflation chart. We’re not talking a little cheaper, a little less per capita, a few percentage points off the cut of GDP that healthcare sucks up. We’re talking way cheaper. Half the cost. You know, like in normal countries.

We’re not talking a little better, skipping a few unnecessary tests, cutting the percentage of surgical infections a few points. No. Don’t even think about it. We’re talking way better. Save the children, help the people who should know better, nobody dies before their time, no unnecessary suffering. Seriously.

I don’t know how high you want to aim, but personally, I think we should aim at least as high as the cutting-edge programs and facilities that are already out there, in the system as it exists today, cutting real healthcare expenses of real people, even “frequent fliers,” by 10, 20, even 30 percent, while making them healthier, much healthier. At least. To me, that’s a wimpy goal, just doing as well as some other people are already doing. Because these programs are just getting off the ground. They’re in the first few iterations. The stretch goal, the goal we can take seriously, is to cut real costs by 50 percent, by making people healthier. There is at least that much potential out there.Continue reading…

Facepalming Our Way into the Future

The reform isn’t perfect, but maybe it’ll help us avoid disaster.

The rapidly ramifying crisis in health care may (we can pray) end all delusions. It may at least begin to weaken them by exposing them to the light, to the sobering effects of reality.

The reform act has not brought us to the Promised Land. By bringing us access without capacity, fierce restrictions coupled with vague language and loopholes, mandates coupled with fines low enough to become the cheap way out, strong new ideas that are only pilots, and tough commissions and task forces that have no teeth, the reform act delivers us into a period of maximum melee, in which the needs and desires of hospitals, doctors, citizens, politicians, insurers, drug companies, device manufacturers and hundreds to thousands of niche industries within the sector, get pitted nakedly against one another.

Everyone in this melee will increasingly be driven by the ratcheting drumbeat of cost, cost, cost—which is another word for over-use of resources.

It can seem at times like a kind of existential madness. But in fact we are engaged in a struggle over the very meaning and substance of who we are, what we do and why we do it. We can hope that at last and increasingly, we will be shedding our delusions and engaging in that struggle on the basis of some kind of reality.

Stupidity Everywhere

You know the facepalm moment. It’s that moment when you smack your hand on your forehead, accompanying the concussive thwap with the expletive of your choice, when confronted by a bit of numbskullery so dense as to tear the space-time continuum.

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Reform: Round 2

Joe flower It’s coming back!

The health care reform debate is only through the first round. In a few years, as early as 2013 or 2014, we are likely to see another round, with at least as much whacked-out drama as this one. But the cry will not be, “Bring back the good old days!” The cry will be, “These costs are killing us! Do something! Now!” This next round will be entirely focused on draconian cost-cutting.

The push for reform was about three things: Cost, quality, and access. Well, one out of three is not bad. The bill we got will eventually do a pretty good job on access, but it does little substantive or forceful about the other two. Quality is not a political issue with any grip; despite what we wonks and practitioners know, the public still doesn’t think that quality is a big problem. But cost? Big time. Continue reading…

Senate Compromise on Health Care Reform: Political Genius?

Joe Flower PrefferedDemocrat Roland Burris, the sudden senator who replaced Barack Obama in that august body, has now joined those who are pledging to filibuster any bill that does not have a “public option” – joining of course those, like Connecticut’s infigurable Joe Lieberman who will filibuster if it does have a “public option.” But the compromise that is brewing may turn all such pledges inside out. The compromise would allow 55 to 65-year-olds to buy into Medicare, while letting under-55s without insurance into the Federal Employee Health Benefits Plan, along with mandates to buy in, and subsidies for those who can’t afford it. If this does indeed emerge, liberal Democrats in both houses may have some trouble defining what they mean by the “public option” they are so strongly demangin. Is it a “public option” for 55-and-overs if they can buy into Medicare? Sure sounds like it – a government-run plan that people can buy into, in competition with private plans. Is it a “public option” if the federal Office of Personnel Management runs an exchange called the Federal Employee Health Benefits Plan (FEHBP) setting the rules and transparency for private plans, with subsidies and tax credits for those 54 and under who can’t afford a health plan?Sounds close, but not quite. Close enough for confusion, at least.

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Sell Patients like Baseball Players – Seriously

Joe Flower Here’s a health care reform strategy that I have not heard anywhere else. Think about this:

Why aren’t health plans more aggressive in promoting the long-term health of their members, like getting them to eat better, stop smoking, get a little exercise, and all that? Because of “churn.” For something that has immediate consequences,  helping their members stay healthy has an immediate payoff for the health plans. But most of the big things that would make you healthier take a longer time to manifest: You quit smoking or start eating better, you will have a much better health profile in five years, but it won’t make as much of a difference in, say, one year.

“Churn” is the industry term for the annual percentage of  members who leave a health plan, and it can be surprisingly high. If each year 20 percent of a health plan’s members go to some other health plan for whatever reason (they move, lose their job, change employers, get Medicare, find a better deal), then it is not worth it for the health plan to invest in their members’ long-term health. If the health plan invests time and effort (which means money) to get you to quit smoking, and you then quit and become someone else’s customer, they lose that investment – and the other company gains, by getting a customer who is less likely to need expensive long-term treatments.

But what if they did not lose that investment?

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Why “free market competition” fails in health care

In trying to think about the future of health care, thoughtful, intelligent people often ask, “Why can’t we just let the free market operate in health care? That would drive down costs and drive up quality.” They point to the successes of competition in other industries. But their faith is misplaced, for economic reasons that are peculiar to health care.

More “free market” competition could definitely improve the future of health care in certain areas. But the problems of the sector as a whole will not yield to “free market” ideas – never will, never can – for reasons that are ineluctable, that derive from the core nature of the market. We might parse them out into three:

  1. True medical demand is wildly variable, random, and absolute. Some people get cancer, others don’t. Some keel over from a heart attack, get shot, or fall off a cliff, others are in and out of hospitals for years before they die. Aggregate risk varies by socioeconomic class and age – the older you are, the more likely you are to need medical attention; poor and uneducated people are more likely to get diabetes. Individual risk varies somewhat by lifestyle – people who eat better and exercise have lower risk of some diseases; people who sky dive, ski, or hang out in certain bars have higher risk of trauma. But crucially, risk has no relation to ability to pay. A poor person does not suddenly discover an absolute need to buy a new Jaguar, but may well suddenly discover an absolute need for the services of a neurosurgeon, an oncologist, a cancer center, and everything that goes with it. And the need is truly absolute. The demand is literally, “You obtain this or you die.” Continue reading…

Why is this the one thing?

By JOE FLOWER

When the terrorist attacks of 9/11 hit the United States, and then suddenly we were plunged into war, first in Afghanistan and then in Iraq, I don’t remember anyone demanding that the wars be “deficit neutral.” No one talked about whether we could afford them. They were things we just had to do.

When George W. Bush proposed giving vast sums to rich people in the form of tax cuts, no one argued that it would be “deficit neutral.” Rather, it was argued that cutting taxes wouldn’t bring in less tax revenue at all, it would bring us more tax revenue, because the economy would grow so much faster. And besides, it was somehow terribly urgent, something we just had to do.

When the banks tottered and needed to be shored up with taxpayer money to the tune of nearly $1 trillion, there was no way to argue this would be “deficit neutral.” We might get the money back, we might not. Whether we could afford it was not the question, we just had to do it to save the banking system. Similarly, the “Stimulus Bill” was terribly urgent, and something we just had to do, whether we could afford it or not.Continue reading…

What would actually work? Driving down the cost of health care

If competition actually drives the cost of health care up rather than down, what would bring lower costs?

What provisions in a “health reform act” would actually drop costs in health care? Let’s leave aside for the moment all the myriad other arguments – some might be seen as too much government intrusion, some would destroy the health plan industry, some would be cripplingly difficult for providers, and so on – and just focus on cost. Given the real structure of health care markets in the United States at this moment, what could be written into federal law and regulation that would actually reduce cost?me of these changes are massive, some would be invisible to those outside the industry, but all could be legislated or regulated, and all would “bend the curve” toward lower costs. Choose any you like, though some are “and” choices, others are “or” choices:

  1. Single payer: Eliminates insurance company overhead, increases medical loss ratio (the percentage of dollars put in returned as medical resources) to perhaps 95%, and gives the government (probably some rate-setting commission) the power to dictate prices and availability, like Medicare on steroids.
  2. “Robust” public option: All providers must take its payments as full payment, rates tied to Medicare rates (perhaps plus a percentage), Medicare rates decided by an independent rate-setting commission.
  3. Limiting medical loss ratios: Many European countries dictate that health plans must return 85% or 90% or 92.5% of the premium paid in as medical services paid out.  U.S. health plans, in contrast, compete on (and brag to Wall Street analysts about) how low their medical loss ratio is. Some are as low as 60%.

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