Tag: Paul Levy

What Happens Next in MA?

Paul levyWhat happens next in Massachusetts with insurance reimbursement rates now that many of the facts and figures have been made public?

Here’s what I see. The dominant parties in the state on whose watch the disparities in the marketplace have taken place — Blue Cross Blue Shield and Partners Healthcare System — face financial and political problems, respectively. The PHS rates that are so much higher than others’ cause a major financial drain for BCBS. They do so in the short run just by the degree of current utilization. The effect is compounded over the long run, though, as PHS has a competitive advantage vis-à-vis other systems in recruiting community-based doctors and thereby brings more and more referrals into its hospitals. That these differentials have now been made public by the state creates a political embarrassment for PHS, which has often asserted that its creation brought about substantial economies of scale through integration of care.

I suspect that these factors will lead to a negotiated agreement between BCBS and PHS, where PHS takes a bit of a haircut in its current reimbursement contracts. Not so much that it dramatically affects the PHS bottom line, but enough so that both parties can say that they have cooperatively acted to slow down the rate of health care spending in the state. Will the new rates be anywhere near the statewide average? No way. Will they do anything to offset the competitive advantage that PHS has had or will continue to have? No.

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Pioneer Speaks about MA Health Reform

Picture 66 The Pioneer Institute is a public policy research center in Massachusetts. On the political spectrum, most people would call it conservative, or a least free-market oriented. In my opinion, regardless of your particular position along that spectrum, the institute’s work is worth reading.

Last month, it issued a paper about the Massachusetts health care reform experiment that serves as a report card on a number of factors, with particular focus on the question of the equity and sustainability of the financing of the health care insurance access system put in place by Chapter 58 of the Acts of 2006.

For those interested in the possible applicability of the Massachusetts model to the national scene, authors Amy M. Lischko and Kristin Manzolillo say:

It is undeniably premature to enact a reasoned national-level solution based on Massachusetts’ or other state experiments. . . .Continue reading…

It’s Up To Us …

Levy A conversation with a reporter yesterday helped me clarify my thoughts about federal health care legislation. In my view, the most effective role of the federal government would be to provide national standards by which the health insurance companies operate (e.g., with regard to pre-existing conditions, rescission, and lifetime limits), require the existence of insurance exchanges, and establish the conditions under which universal access to insurance is made possible. Other items I would suggest for federal legislation are summarized below.

I am hoping the US government will not attempt to control the costs of health care by making legislative decisions with regard to clinical matters. Not because we should abandon cost control; but because federal efforts in this sphere are likely to be crude and not clinically appropriate. You just have to look at the process by which the USDA food pyramid is influenced by food product lobbyists to imagine how the government would attempt to regulate the design and provision of care among medical specialties, equipment and supply manufacturers, and pharmaceutical companies.

As should be evident to readers, I think it is possible for the participants in the health care system to accomplish major changes in the rate of medical cost inflation. Two articles have this theme. One is by Business Week’s Catherine Arnst. The other is by Lucien Leape, Don Berwick, and others in Quality and Safety in Health Care. Both are worth reading, and they overlap in recommending several areas — reducing infections and other preventable harm; empowering patients and families to participate in their care; and disclosing and apologizing for mistakes.

Beyond these articles, there is a remarkable consensus on these items, and yet hospitals and doctors often fail to implement them. Even hospitals that house some of the most accomplished authors in these fields often do not follow the advice of those colleagues when it comes to making improvements in the delivery of patient care.

It is not unusual for industries facing structural change to be slow to move. Why? Because the leaders of those industries were promoted based on their success in the past financial, political, and social environment. They were hired for their ability to maintain the status quo, rather than for their ability to make change. Eventually, though, societal forces make themselves felt. If an industry does not adapt, the government will step in. The medical profession has to decide whether it wants to take charge of this process or abdicate to Congress the right to act in its stead.

A Backhanded Way to Make Policy

One of the arcane steps in government regulation of health care is the Physician Payment Rule. This is the manner in which CMS, the Medicare agency, annually allocates payment dollars among the various specialty services. The PPR effectively makes policy.

The construct for all of this is a zero-sum game. When CMS wants to raise fees for some specialties (e.g., primary care doctors), it is required to reduce the fees for others.Continue reading…

The Gentleman From Indiana

In his Washington Post column this week Dan Balz wonders whether Evan Bayh was overstating the degree of partisanship in Congress and whether, notwithstanding that, he should have stuck around to deal with the problem.

I don’t think any of us have been alive long enough to know whether the first is true. Politics always seems at its worst when you are in the middle of it. It may be, though, that the existence of social media has made it more combative, for the old-style behind-the-scenes sausage making is no longer possible. Also, clever users of these media can create a “movement” in just a few hours, pushing positions to the extreme. Though politicians have become experts in using social media to run election campaigns, they have not yet figured out how to use these tools to help build bipartisan coalitions to govern.

And, on the second, we have no right to judge this gentleman on his personal decision. If he no longer wants to try to stay in Washington to work on the problem, there will be plenty of other candidates. No one is indispensable.Continue reading…

How to Get Enough Votes in the Senate

Picture 66 When Hillary Clinton was running for President, she set forth a more modest agenda for health care reform than her competitor, Barack Obama. Maybe she understood better, based on her experience, how difficult it is to get a comprehensive bill through Congress in this field.

What is possible now that the President has lost the 60-vote majority in the Senate? I think the thing to remember is that he was having trouble even holding together the 60 votes he used to have. He had to agree to an assortment of give-aways — to Nebraska, to Louisiana, to the labor unions — to get the votes he needed. In part, that proved to be the undoing, as Massachusetts voters watched this sausage being made and sent a message through the election of Scott Brown that they didn’t like what they had been seeing.

Now, it may be that the Republicans will act to kill anything that might come along. I don’t think so. I think they are willing to be part of a bill, but it has to be a bill for which they can claim credit among their constituencies. What might it be?

Insurance reform: People, irrespective of party and political leanings, despise the practices of insurance companies that limit or take away coverage. The use of pre-existing conditions to deny coverage, lifetime limits of coverage, and rescission of policies are nasty and unfair. These practices remain as sources of insecurity among Americans, even those with insurance. There should be near-universal support to change them.

Tort reform: I think that most people feel that, while people should have a right to sue for medical malpractice, the process that exists today is inefficient and arbitrary for both plaintiffs and defendants. Any doctor will tell you that fear of such suits also leads to the practice of defensive medicine, driving up costs for all of society. Tort reform does not require limitations on payments. It could be accomplished with the establishment of specialized courts and procedures that would add greater certainty to outcomes and reduce the tensions and abuses associated with the system. This should not be a partisan issue.

Payment reform: Nobody likes the results of a system that systematically underpays primary care doctors and leads them to a life of 18-minute appointments and a role as triage doctors, a way station to referrals to higher paid specialists. If Congress were to order Medicare and state Medicaid plans to take the lead in establishing reimbursement rates for PCPs that reflected their value to families and patients, we would be on the way to a more rational system of care. Likewise, if physicians were paid for care delivered by telephone and electronically, millions of unnecessary and time-consuming office visits could be eliminated. If these steps were taken for Medicare and Medicaid, private insurers would follow.

Transparency: A national mandate for public disclosure of the rates paid by insurers to providers would help drive greater rationality in payment methodologies in the states. Disclosure of clinical outcomes in clinically important arenas would provide impetus to improvement in patient safety and quality. How can this be a partisan issue?

Now what about access? I fear that expansion of insurance coverage is the third rail in this debate. Why? Because it requires revenue to support the subsidies that would be required, and tax increases are really hard to achieve. The President made this issue more radioactive than necessary by proclaiming at the start that you could get access, choice, and lower costs all in one neatly wrapped package. Everybody in the field knew that you could not. This then resulted in sleight-of-hand revenue measures that became the undoing of the bill as Christmas tree ornaments were added to undo the effect on particular states or interest groups.

As I have stated here, a fair approach to generate the revenues for expanded access is to eliminate or reduce the pre-tax treatment of insurance premiums. Doing so would use the progressive income tax system in a way that would apply a larger percentage of these costs to more wealthy people. Could this approach gain a bi-partisan consensus? It could not gain support even among the Democratic majority, so I am guessing not. And the Republicans seem to express no interest at all in mandates for greater access. Maybe we have to accept as a reality the idea that expanded access is a casualty in this debate. I hope not, but I don’t yet see an answer to this that can get 50 votes, much less 60.

Why Wait Four Years?

I was struck during President Obama’s health care speech before Congress several months ago that the reforms he advocates would not go into effect for four years, until 2014. This timetable, too, is written into both the House and Senate versions.

Why the delay? It is hard for me to imagine, even given the federal rulemaking process, that it should take four years to establish an insurance exchange from which people can buy coverage. This is the exchange that would eliminate the nasty practices of insurance companies: Denying coverage because of pre-existing conditions; limiting annual or lifetime payments; and rescission of policies. It is hard for me to imagine, too, why it should take four years to fully deliver targeted subsidies to lower income people so they can afford insurance.

As noted by Princeton Professor Paul Starr in an article in the  New York Times earlier this week: “By comparison, when Medicare was enacted in 1965, it went into effect the next year.”

This leaves me with a bad feeling. It looks like the Obama team does not want implementation of the health care bill to take place during their first term. Why? Perhaps they know that the cost of the plan is higher than they are saying. Or maybe they know that the options available to consumers will be less attractive than currently portrayed.

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Who Should Tell Your MD What to Do?


In this Wall Street Journal op-ed, Norbert Gleicher suggests that expert panels won’t improve health care because the the quality of the research on which they would base their physician practice guidelines is not reliable. Instead, he suggests that our system can self-correct when experts lead us astray. He asserts that we have a “well working free market of ideas in health care, where effective therapies can rise to the surface and win out.”

I’m somewhat sympathetic to Dr. Gleicher’s point about a government-imposed clinical review process, but he overstates the case about a current free market of ideas. Individual insurance companies and Medicare currently make payment decisions with regard to therapeutic judgments every day. How are they informed, and what are their sets of vested interests? Much of that remains hidden from public view.

Meanwhile, too, doctors and hospital practice what Brent James calls “regional medical mythology,” patterns of care divorced from scientific evidence, based as much on the local supply of specialists and what they learned from their predecessors as any other factors.Continue reading…

Shutting Down Social Media? Not Here.


Paul Levy is the President and CEO of Beth Israel Deconess Medical Center in Boston. He blogs about his experiences at Running a Hospital, one of the few blogs we know of maintained by a senior hospital executive and where this post first appeared.

The following email message was broadcast last week in a Boston hospital. Of course, you can guess my view of this: Any form of communication (even conversations in the elevator!) can violate important privacy rules, but limiting people’s access to social media in the workplace will mainly inhibit the growth of community and discourage useful information sharing. It also creates a generational gap, in that Facebook, in particular, is often the medium of choice for people of a certain age. I often get many useful suggestions from staff in their 20’s and 30’s who tend not to use email. Finally, consider the cost of building and using tools that attempt to “track utilization and monitor content.” Not worth the effort, I say.Continue reading…

Groupon, Livingsocial, and digital norms

Regular readers may have noticed that I am a bit of a social media junkie– this blog, Facebook, Twitter — but I am also intrigued by social media sites that are set up only for commercial purposes. It is fun and instructive to watch the evolution of these sites.

Along those lines, a few weeks ago, I wrote about Groupon. The concept: The retailer offers a discount deal in the city of your choice, but only if enough people sign up for it.

The viral power is amazing, because after you sign up for something you want, you contact all your friends asking them to do the same so you can get the deal. Meanwhile, the retailer gets noticed by people with an affinity for his/her product or service, and gets a bundle of cash in prepayments. The folks at Groupon get some kind of fee. Everyone is happy

Now arises a new site, soon to go into business, called Livingsocial. Like Groupon, you can sign up for the deal of the day, and if enough people sign up, the deal is on; but unlike Groupon, if you get three other people to sign up for the deal, you get your coupon for free.

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