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Tag: Policy

Controlling costs is the central problem in U.S. health care

The central problem in the U.S. health care system isn’t cost or insurance, per se, it’s the challenge of increasing health care value to the patient/consumer.

That means we must improve the poor quality and inefficiency of care, so that we all receive only the care we need, delivered in a timely and effective manner, without waste and over-treatment, and with a focus on integrating “well-care” (prevention and self-management) with sick-care.

It also means dealing with the knowledge void, an ironic situation in which our health care community is drowning in oceans of information, yet no one knows the best ways to prevent health problems and treat them cost-effectively, especially when you take individual differences into account. To address this problem, we need better health information technologies, as well as a collaborated effort to develop, disseminate, and deliver cost-effective evidence-based care.

If consumers were to receive high value health care in this manner, costs would be lower since poor care costs more and delivering only the minimal necessary care typically results in better outcomes! More appropriate care, delivered competently and cost-effectively through cost-conscious, patient-centered “medical homes,” for example, is the only way to control costs long-term.

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When is the same spending more spending?

When it’s routed through the government because their spending is done with mythically different dollars than private spending. Or at least it is in the bizzaro world of free-marketeer policy analysts. Let me explain…

A couple of weeks back a small consulting firm working for McCain sent me an article written by University of Minnesota economist Roger Feldman about the cost of Obama’s health plan. They were complaining that I hadn’t featured their analysis. So I read the report which suggested that the Obama plan would cause $450 billion in health spending. Bear in mind, Obama suggests that it’ll cost $65 billion, so this is quite some stretch.

I was going to write a long, learned article about this, but instead I’ll just show you the email back & forth.

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Golden Rule Founder dies

It is not seemly to speak ill of the dead so this is all you’ll hear from me about the passing of Patrick Rooney, founder of Golden Rule. An obituary is here.

The problem with astroturf

….is that sometimes real weeds might sneak in and mess up the nice green carpeting you’re laying down.

To wit, here’s an exchange between an SEIU member and AHIP President Karen Ignagni at the AHIP astroturf meeting in Ohio. When asked why Wellpoint’s CEO is still talking about profitability (and going off message to the political world when going on message to Wall Street), Ignagni starts off about “No Margin, No Mission”. 

Err … Karen, that’s the line used by non-profits that (theoretically) have a mission to do some social good. The mission of investor-owned companies like Wellpoint, Healthnet, Aetna, United, et al is to make a profit. Your opponents can show you lots of “insurance companies” that do a pretty good job (or at least as good as your members and usually better) and don’t make a profit. Hint: one’s called Medicare, another is the VA.

And at another astroturf forum a different AHIP spokesman also showed a lack of comprehension of basic economics when he apparently said that it is necessary for the insurance industry to make profits to cover costs. Err no, you have  to cover your costs to cover your costs — profit is on top of that!

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Has Steve Poizner gone soft?

California’s de facto health insurance commissioner Lisa Girion reports on California’s actual Insurance Commissioner Steve Poizner’s agreement with Healthnet. After all that fuss, the deal is that Healthnet pays $14m in canceled medical bills, reinstates around 1,000 canceled policy-holders and pays a $3.6m fine. Poizner agreed to this despite all his tough words of not too long ago.

How is it that the punishment fine is less than the cost of the offense? So let me see. Don’t pay $14m in medical bills you’d agreed to insure, and either get away with it, or run the slight risk of not getting away with it and pay $18m several years later. That’s a deal any self-respecting egregious booty capitalist would take. And let’s face it being one of those is a requirement of the job to run a health plan these days.

Of course, the separate $9m fine Healthnet has already seen in one case alone—handed down by an arbitrator whose decisions cannot be overturned later—gives a clue to what the real damages will be in the courts should these cases get there.

So no wonder Shernoff and the trail lawyers are pissed that this settlement may undercut their case. And why has Poizner rolled over?

UPDATE: Darrel Ng, Press Secretary at the CA Department of Insurance is working late on Friday and responded to this post "One of the highlights of the settlement is that by accepting the payments and health insurance, patients do not have to forgo future litigation. So while I know critics have made the assertion that their case may be undercut, I’m not sure why they would believe that’s the case." Darrel didn’t explain why the fine for one case in arbitration was three times the fine for 1,000 cases from the DOI.

Grim economic outlook

Congressional Budget Office Director Peter Orszag is playing a role he admittedly hates: the grim economist. The CBO released the annual summer update to its Fiscal Outlook for 2008 to 2018.

On the "Director’s Blog," Orszag explains the economic report and gives it context, including what the takeover of mortgage giants Fannie Mae and Freddie Mac means for the federal budget. The blog, in my opinion, is a great resource and worth a regular read.

Here are some bullets from the update — note health care costs nearly top the list of the nation’s fiscal concerns:

CBO estimates that the deficit for 2008 will be $407 billion higher than last year’s $161 billion. As a share of the
economy, the deficit is projected to rise to 2.9 percent of GDP this
year, up from 1.2 percent of GDP in 2007.

Over the longer term, the fiscal outlook continues to depend mostly on
the future course of health care costs as well as on the effects of a
growing elderly population. CBO estimates that federal spending on
Medicare and Medicaid will grow to 6 percent of the GDP in 2018 and 12
percent of the GDP by 2050.

Another state gov’t. misses the boat on patient-centered care and HIT

Amid more data released that consumers are not using personal health records (PHRs) or don’t even know what they are, the state of West Virginia has launched a Web site designed to convince consumers of the merits of health information technology (HIT).

As best I can tell from eHealthWV Web site, here’s the plan: “To ensure consumer input and involvement in the process of health information exchange and electronic health records, WVMI and its partners launched a new phase to the project in mid 2007.  It involves educating consumers about electronic health records and health information exchange.”I’m sure they mean well, but it would be helpful if one of these state efforts “ensured consumer input and involvement” by actually soliciting their input before designing their outreach. Right now, most states and health information exchange activities are focused on addressing consumers’ fears about data rather than their needs about health care.

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Health care lessons from the Titanic

The U.S. Health Care system is like the Titanic — a big, fancy,
expensive ship that unequally doles out limited resources depending on class
status and is destined to hit an iceberg and sink.Titanic

A professor used this analogy recently to provoke students to look
more deeply into the complex and intractable factors that determine health status. Biology
and genetics surely are important, he said, but one cannot ignore the environmental,
social and economic factors that influence an individual’s
susceptibility to disease.

Comparing the U.S. health care system to the Titanic is an analogy as hackneyed as saying the system is in crisis. Yet, it remains useful.

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Is John Goodman joking or just mean?

The uninsured numbers went down a touch because in 2007 Medicaid expanded. In 2008 they’ll go up as unemployment increases and S-CHIP coverage is cut. Really this doesn’t change too much.

Right-wing nut jobs all over the Internet are saying that uninsurance doesn’t matter. It’s surprising that one of the more sensible right-wingers has joined in and now says that the uninsured don’t exist.

But the numbers are misleading, said John Goodman, president of the National Center for Policy Analysis, a right-leaning Dallas-based think tank. Mr. Goodman, who helped craft Sen. John McCain’s health care policy, said anyone with access to an emergency room effectively has insurance, albeit the government acts as the payer of last resort. (Hospital emergency rooms by law cannot turn away a patient in need of immediate care).

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Cost-containment missing piece of Mass. health reform

Niko Karvounis tracks the health care system for the Century Foundation. This post first appeared on the HealthBeat blog, one of our favorite health care reads.

The Massachusetts experiment in health care reform is all about expanding access.  But it doesn’t try to control costs. This, in a nutshell, is why it’s running into trouble.

The plan didn’t reform health care delivery, just coverage. Granted, in terms of bringing more people in under the tent, it’s been a success: Since the plan went into effect in 2006, 439,000 people have signed up for insurance — a number that represents more than two-thirds of the estimated 600,000 people uninsured in the state two years ago. This surge in coverage has reduced use of emergency rooms for routine care by 37 percent, which has saved the state about $68 million. (Going to the ER for routine care drives up health care costs by creating longer wait times and tying up resources that can be used to help patients who are critically ill).

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