Tag: Medicare

Ba-Ba-Ba-Ba Boom!

Jan 3, 2011• 1

By RICHARD REECE, MD

January 1, 2011 -Yes, yes, it’s true. Today 79 million baby boomers, born from 1946 to 1964, start turning 65.

Yes, yes, it’s true. Boomers begin qualifying for Medicare.

Yes, yes, it’s true. If my math is right, this means some 12,015 boomers each day over the next 18 years will enter the Medicare ranks.

That’s the biggest news this New Year’s Day. The second biggest news is the information technology boom, triggered by IPad, Kindle, and the social media. The third biggest news, connected to the first two, is the health reform law and its impact on our unsustainable entitlement programs.

Let’s take these pieces of news, one by one.

Boomers

Boomers, whether by Botox, cosmetic surgery, exercise, antioxidants, tobacco cessation, or life-style and life-savings medical technologies, plan to maintain their youth, and to cede nothing to generations that precede or follow them. That’s if things do well. Otherwise, aging boomers who become ill, may ask , “Why me? What the hell happened?”

Does Medicare Have it Right in 2011?

Jan 3, 2011• 3

By ED PULLEN, MD

Starting in 2011 with the regulations required by the PPACA Medicare will mandate copay and deductible free preventative services for our older Americans. This is great news for primary care physicians. I’m a family physician, and have struggled for years with the fact that just about every private insurance plan covers an annual physical exam, but Medicare did not. What this anti-intuitive dichotomy accomplished was bringing in my relatively healthy 30-something patients for a physical exam each year, while for my 70 year old for whom far more preventative services were recommended by the United States Preventative Services Task Force was not covered for a preventative exam ever. Not annually, not every 3 years, just once at age 65 to last their lifetime.

As primary care physicians we tried to our best to squeeze preventative care into visits primarily for other complaints. At a visit of my diabetes patients every 3 months I’d try to focus on the diabetes and save enough time to review immunization status, assure breast and colon cancer screening was up to date, help med decide if they wanted prostate cancer screening, …. I’m looking forward to being able to ask my seniors to schedule a preventative care visit annually now and being able to focus on these issues without having to eke out time in a problem oriented visit.

Still I have to say if the goal is to provide incentive to older Americans to go to their physicians for services that will really make a difference in the health of the Medicare population problems I think congress has it wrong. If we want to prevent unnecessary hospitalizations and expensive complications from neglected medical problems, and have the biggest impact to reduce the burden of expensive medical complications and I believe the most efficacious preventative services we can offer in health care are secondary prevention and disease management. I’d love to think that by primary prevention, education, and physical exams I can help patients improve their health and subsequently reduce costs and get better outcomes. The problem is that there is little evidence that this is the case. This new regulation, offering a free once annual preventative care visit may find some early cancers, improve immunization rates and make us feel like we are being proactive.

Goodman’s Law

Dec 17, 2010• 13

By JOHN C. GOODMAN, PhD

The other day I ran across five items of interest:

1. A news article about Medicare paying $800 to rent a wheelchair that could have been purchased outright for $350;

2. An article in The Atlantic arguing that the United States spends more on renal dialysis and gets worse results than other countries because of the nonsensical way we pay for dialysis;

3. A Uwe Reinhardt explanation of how Medicare pays hospitals (via an approving pointer from Austin Frakt) along with Uwe’s defense of the system; but nonetheless linking to

4. A Reinhardt Health Affairs interview with former CMS director Tom Scully who opines that “Medicare is a dumb payer;” and

5. A Reinhardt explanation of how Medicare pays doctors (7,000 physician tasks, each with a price that varies for every city, town and hamlet in the land), along with a challenge to readers to come up with a better way.

Okay. I accept the challenge.

I sometimes wonder if health economists actually understand how other markets work. Let’s try a thought experiment. Suppose you ran a business that purchased lots of wheelchairs and you had the misfortune of paying the way Medicare pays. What do you think would happen?

The minute your presence in the market was generally known — probably before the first wheelchair was even delivered — you would be visited by a rival vendor offering to meet your needs for, say, two-thirds of what you were paying. Then another rival would offer to top that — say, cutting your costs in half… and before long the cost of the wheelchair to you would be a fraction of what it started out to be. This is how normal, sensible people function in typical markets, day in and day out.

If I Ruled the World

Dec 4, 2010• 23

By DAVID DRANOVE, PhD

If you study previous attempts to reform healthcare delivery through the private sector, there is one common thread. These attempts all failed because of an absence of proper management information systems. We need integrated electronic health records. And not just to improve medical decision making. We need EHR that can be used for management decision making – for contracting, measuring costs, measuring and rewarding quality; I could go on and on. We are trying to solve management problems in a $2 trillion industry using management information systems that would be an embarrassment in nearly any other sector of the economy.

Of course, the industry has been pushing EHR for decades and there are places where EHR is really first rate. Kaiser is a great example but also a special case because of its thorough vertical integration and long history. And even Kaiser has been unable to replicate itself outside of its core markets. The sad fact is that most providers have little incentive to adopt EHR, and even when they do, they have little incentive to be compatible with other providers. Unfortunately, the network externalities benefit purchasers and consumers a lot more than they benefit providers, so don’t expect the compatibility problem to solve itself.

My proposal is simple. Assemble a panel consisting of medical professionals, managers, and insurers. “Lock them in a room” for 72 hours and tell them to choose from among the many fine existing EHR systems. Tell them they can combine the best features of each if they wish. Once we have settled on an EHR system, give every provider one year to adopt it. If they refuse, deny them Medicare and Medicaid payments. Combine the stick with a carrot – subsidies to providers who have limited financial resources. I believe the total one-time subsidies would be less than $50 billion, a drop in the bucket compared with the size of the system.

The Libertarian Mind

Dec 3, 2010• 9

By RONALD PIES, MD

“It is an eternal obligation toward the human being not to let him suffer from hunger when one has a chance of coming to his assistance.” –Simone Weil

Libertarianism is much in the news these days, as the political divide in the U.S. seems to widen almost before our eyes. Before providing a rough, notional definition of “libertarianism”, I should offer readers some caveats. First, I am not a political scientist, professional philosopher, or economist, though scholars in these fields have offered many pointed critiques of what is loosely called libertarianism (see references). Furthermore, as a psychiatrist, I am trained to diagnose individuals whom I have professionally examined. I am not in the habit of “diagnosing” movements, ideologies, or political groups; indeed, the idea of doing so is clearly outside the purview of medical or psychiatric practice.

Nonetheless, as a lecturer on bioethics and humanities, it is impossible for me to read the platform and proclamations of the Libertarian Party without drawing some tentative conclusions as regards the nature of this movement; its psychological underpinnings; and its ethical implications for the poorest and sickest among us—those sometimes referred to as “the destitute sick.”

I do not propose to “psychoanalyze” particular individuals, or to speculate on the motives of political figures who figure prominently in American politics. And, because the term “libertarian” has such a wide range of meanings, I will focus my attention on the official platform of the Libertarian party, which is very lucidly spelled out in a publicly-available venue (http://www.lp.org/platform). For the most part, I will deal with the Libertarian party’s position on health care and social support systems, while offering some tentative impressions on the “psychology” of libertarian theory.Continue reading…

The Ryan/Rivlin Plan

Nov 29, 2010

By JOHN GOODMAN, PhD

Congressman Paul Ryan (R-WI) and Alice Rivlin, former director of the Congressional Budget Office (CBO), have proposed an entitlement spending reform plan that is striking both for its boldness and its left-right-coming-together origins. There are a number of interesting parts, but I want to focus on the three most important:

Medicare would, for the first time, be transformed into rational insurance. Beginning in 2013, all enrollees would be protected by a $6,000 cap on out-of-pocket expenses; in return they would pay for more small expenses on their own.
After a decade, people newly eligible for Medicare would receive a voucher to purchase private insurance instead. The value of the voucher would grow at the rate of growth of GDP plus 1% (note: for the past four decades, health care spending per capita nationwide has been growing at about GDP growth plus 2%).
Medicaid would be turned into annual block grants to the states. The value of the block grants would also grow at GDP growth plus 1%.

Bottom line verdict: This is a good proposal that deserves serious attention. To guarantee its success, however, more needs to be done to (1) allow the private sector to control costs through economic incentives, competition and entrepreneurship and (2) allow young people to save for the growing share of expenses they will be expected to bear.

How Does This Plan Compare with the Affordable Care Act (ACA)? Given that Ryan has been previously attacked by Paul Krugman and others on the left because of his ideas about voucherizing Medicare, a natural question arises. How does the Ryan/Rivlin slowdown in Medicare spending compare to the health reform bill Congress passed last spring — a bill supported by some of the very people attacking Ryan?

“Don’t Litigate, Innovate.”

Nov 29, 2010

By ROBERT LASZEWSKI

What if a Republican governor and a Republican legislature had the ability to implement their version of health insurance reform and the federal government would have to pay for it? It’s a great idea. And I’m thrilled to say that a bi-partisan bill has already been introduced in the Senate by Ron Wyden, D-Ore., and Scott Brown, R-Mass., that would help facilitate exactly this end.

First, let’s review section 1332 of The Patient Protection and Affordable Care Act to realize how states are already — at least eventually — given the ability to innovate in this manner. Here is a simplified summary:

A state may apply to the Health and Human Services secretary for a waiver of all or any requirements with respect to the insurance exchanges, mandates, and subsidies with respect to health insurance coverage within that state for plan years beginning on or after January 1, 2017.
The secretary has to provide for an alternative means by which the aggregate amount of the tax credits and subsidies, which would have been paid on behalf of participants in the exchanges, would instead be paid to the state for purposes of implementing their own version of the law.
The secretary may grant a request for a waiver only if the secretary determines that the state plan will provide coverage that is at least as comprehensive as the coverage defined under the new law and offered through similar exchanges established by the states.

The Penguin Problem

Nov 22, 2010• 11

By VINCE KURAITIS, JD

Remember the penguin problem described by economists?

No one moves unless everyone moves, so no one moves.

Overcoming the penguin problem has a lot to do with creating expectations. A recent writing by Dr. James O’Connor in Physician Practice expresses a voice from the physician community that I’ve never heard before. His essay is entitled “Meaningful Use — Doctors Have No Choice”.

Physicians Have No Choice Other Than to Adopt EHRs?

Dr. O’Connor argues that physicians are effectively being forced into adopting EHRs. He cites facts and reaches a powerful conclusion:

1. CMS penalties begin in 2015.
2. What if you won’t or don’t accept Medicare/Medicaid patients (13 percent of practices in 2009, up from 6 percent in 2004? In August, four major insurers (Aetna, Highmark, United Health Group, and Wellpoint) announced that, at a minimum, they will link their pay-for-performance programs to federal meaningful use criteria. Other insurers are likely to follow.
3. Do you run one of the increasing number of “boutique” or VIP practices that work on a cash-only basis? The American Board of Medical Specialties (ABMS) released a statement in August saying that they intend to link meaningful use of health information technology into the ABMS Maintenance of Certification© program.
4. You don’t care about being board certified? (Sound of crickets chirping.) The Final Rule gives states the authority to impose additional requirements that promote compliance with meaningful use. As reported in Physicians Practice, the state of Massachusetts may take away your license to practice medicine in 2015 unless you demonstrate meaningful use of an EHR system. In Maryland, private insurers will be required to build incentives for acquisition of EHRs and penalties for not adopting them into their payment structure.

OK, so technically, we do have a choice. We could stop taking Medicare and Medicaid patients, accept cash only, give up our board certification (and thus usually hospital privileges), and move to a state (or country) that doesn’t impose EHR requirements. But is that really a choice? No.

Hospital Price Dispersion

Nov 18, 2010• 6

By DAVID DRANOVE, PhD

A study by the Center for Studying Health System Change that will be released today shows that hospitals receive different prices for treating the same diseases. Center President Paul Ginsburg says this about the findings:

“The variation in hospital prices found in this study are (sic) inconsistent with highly competitive markets—at least for markets outside of health care,” said HSC President Paul B. Ginsburg, Ph.D.,

Hospital markets may not be highly competitive, but this argument is silly. One might as well say “The variation in automobile prices is (not “are”) inconsistent with highly competitive markets.” But one would be wrong in either case.

Vertical quality differentiation (i.e., some sellers are better than others) generates price dispersion in competitive markets. It is only in the most basic treatment of competition — in the first week of an intro economics course — that vertical differentiation is ignored. Observed price dispersion is not incompatible with competition.Continue reading…

Rating the Raters: Physician Compare

Nov 18, 2010

By NAOMI FREUNDLICH

Let’s say you’ve enrolled in a new health insurance plan and need to find an internist who participates. How do you decide which doctor to choose? My (long deceased) grandmother made her choices by using the following criteria: She looked for a male doctor with a Jewish-sounding last name who graduated from an American medical school—preferably one located in New York City. Nowadays her narrow (and culturally biased) criteria would have excluded some of the most esteemed practitioners around.

If you are like most people, you don’t depend on your grandmother’s advice to find a physician, but rather ask friends, colleagues or other doctors for recommendations. But taking one person’s experience with an internist or surgeon as a signal that he or she is “really good” is still far from the optimal way to choose a practitioner.

Over the years, several commercial websites like HealthGrades and Angie’s List have cropped up that provide such consumer-friendly information as the distance a doctor’s office is from the patient, and whether foreign languages are spoken there. They usually include ratings that reflect consumers’ personal experiences with the practitioner. For people who want to dig deeper, most state medical boards collect data that can be searched to find out where your doctor went to medical school, where he did his residency and what board certifications she has. In some states you can also search to see if the doctor in question has received disciplinary action or been sued for malpractice.

This is a lot of on-line legwork for the average person—a task that even professionals can find difficult. Chip Amoe, assistant director for federal affairs at the American Society of Anesthesiologists told a group recently, “When I tried to go find a primary care physician, I couldn’t. You know, it was very difficult. I had to go on several different Web sites to be able to find [one].”