Tag: Policy

HEALTH PLANS/POLICY: Quinn rips Weintraub

Jun 18, 2007• 8

Dan Weintraub who’s an interesting (and rare) right-wing journalist working in health care wrote a pretty dumb opinion piece in the Sacramento Bee last week saying that regulating health insurers was the wrong idea and wouldn’t work—because of course most of the money they get in goes out the door to the health care system—so it’s the wrong place to look. In the specific instance of rate regulation only, he may be somewhat right—but of course there’s a whole lot of regulation of insurers that could make a huge difference to that underlying health care system.

I was going to rip him a new one, but THCB regular Matt Quinn did it for me and the Bee printed his letter on it on Sunday.

"Regulating insurers won’t cut health costs," June 10: Daniel Weintraub correctly argues that current proposals to regulate health plan profitability will not materially impact overall health care costs. Imposing rules mandating spending on medical care or requiring permission to raise rates could perversely impact the quality and affordability of care. However, he misses a couple of key ways that regulators could impact the affordability and access challenges plaguing health coverage.

Mandating both guaranteed issue (requiring insurers to cover all comers) and community rating (prohibiting insurers from factoring in age, sex, previous medical conditions, or other factors in setting rates) sets a level playing field for insurers to compete on delivering value to their customers. Guaranteed issue and community rating require each other and are both necessary for reform efforts to work. Since the managed care backlash in the 1990s, insurers have largely given up on holding down health care costs and today compete primarily on underwriting — skimming healthy people and shedding sick or otherwise unprofitable ones. Some have even been caught underwriting retroactively or canceling coverage for members who incur medical bills. Mandating both guaranteed issue and community rating forces insurers to compete on their ability to deliver quality, cost-effective care for a population — and not on their skill in underwriting.

Although Matt misses one extra thing need to make guaranteed issue and community rating work—compulsory participation in the system by all (universal coverage) and cross-subsidization to those who can’t afford to buy in from the wealthier taxpayers. The good news is that the Democrats running Arnie’s reform efforts know about that.

POLICY/HEALTH PLANS: More communism at the Wall Street Journal

Jun 14, 2007• 9

More radical Bolshevism at the Wall Street Journal. Venessa Furhmans is now saying that Health Savings Plans (are) Start(ing) to Falter. How dare she! She’s going to get it when Rupert takes over!

On the other hand, just dumping people into HSA and CDHPs was always going to raise dissatisfaction, and people, in general, do not want to shop at the point of care for medical treatment because it’s really, really hard.

In a survey published last month by Towers Perrin, an employee-benefits firm, employees enrolled in them said they felt less capable of finding a quality doctor or hospital, though they often were in the same network as colleagues in other plans. Only 29% said they tried to save money in their accounts for future medical expenses. Though the consulting firm says consumer-directed plans have much potential, its executives were surprised consumer responses were so negative. "If I were a product manager in any other industry and saw scores this low in customer satisfaction and understanding, I’d be thinking of pulling that product from the shelves or retooling it," says David Guilmette, managing director of Towers Perrin’s health-care consulting practice.

Still it’s a little ironic that a benefits guy is knocking CDHPs. After all, who the hell has been pushing them all this time? And (to quote myself), remember kids, the CDHP is the bastard child of a one night stand between a benefits consultant with nothing to sell and a right-wing think tank that can’t do basic math.

QUALITY/POLICYThe NY Times has licked its sore all better!

Jun 14, 2007

The New York Times is suddenly acting like Alain Enthoven and Jack Wennberg have taken over its health care reporting! This is the third article saying sensible things about the health care system in less than a week! Today, following the stories about practice variation in back surgery and Eliot Fisher’s work at Dartmouth, you wonks will all be amazed that Reed Abelson tells the public that In Health Care, Cost Isn’t Proof of High Quality.

They say that it takes about 17 years for a medical discovery to make it into general practice. Funnily enough I heard exactly the same stories about low quality hospitals and surgeons being the highest cost producers 17 years ago in Alain Enthoven’s class! How long before the Wennberg/Enthoven mantra make it into the public’s assessment of the health care system?

POLICY: Pandemic Flu Leadership Blog

Jun 13, 2007• 1

I am supposed to be (but for reasons of schedule and health—I’ll explain later—failing to be) one of the participants in the Pandemic Flu Leadership Blog. But there are lots of great entries there and currently there is Live Blogging of the Influenza Leadership Forum in Washington, DC. Check it out and hopefully I’ll be able to join in later in the week.

POLICY: Jonathan Cohn, on film and in the studio

Jun 13, 2007

Up at WorldHealthCareBlog (eventually after some production delays) is the interview I did back in April with Jonathan Cohn, author of Sick.. That’s Sick the book as oppsed to the remarkably similar I guess (as I havent seen it yet) Sicko the movie.

And in an appalling sloppy piece of journalism or editing in the UK newspaper The Independent Andrew Gumble retells a seres of stories from Cohn’s book Sick and ascribes them to Moore’s movie, even though he mentions Cohn’s book later.

I guess Jon should scruff up and put on a few pounds….

POLICY: And just in case you thought things were getting better

Jun 12, 2007• 2

The answer is not much.

Aon surveyed more than 70 leading healthcare insurers and found that healthcare costs are projected to increase by 10.9 percent for HMOs, 10.8 percent for POS plans, 11.2 percent for PPOs and 10.7 percent for CDH plans. This represents rates of increase lower than one year ago, when HMO cost increases were 12.2 percent, 11.9 percent for POS plans, 12.4 percent for PPOs and 12.5 percent for CDH plans.

So in this survey premium cost growth rates are still well, well above wage growth. So a bigger and bigger share of wages (or the total available to pay wages) is going towards healthcare. And now the public sector, with its new accounting requirements, is starting to run into the same problems. So at some point those “unsustainable” trends start becoming apparent. While the NY Times focuses on the problems within the system, the LA Times has been focusing on the impact on financing and insurance. Maybe the word will get out of those two august organs and make it into the Six O’Clock news sometime.

But it’s all part of the same issue, and eventually there will be some kind of political solution. But of course things might get much worse before they get any better.

POLICY: Wow!–sensible stories in the NY Times

Jun 12, 2007• 2

Monday’s NY Times had a sensible story about practice variation, essentially writing a guide to the Dartmouth Atlas. What’s remarkable is that it’s the second story about the topic in less than a week. David Leonhardt wrote a sensible one a few days back that was featured in THCB.

This is from the paper that couldn’t stop licking its festering sores on the same topic last year, when it printed four articles in quick succession that said that all our health care spending was essentially demanded–and worth it–and that there was no reason that we shouldn’t spend 20% of GDP or even more on health care. After all it was what we wanted, and what did we have to spend the money on that was better?

(Leonhardt somehow has written about the Dartmouth Atlas stuff and still believes that we should spend 20% of GDP on health care according to an email he sent me! So they’re not out of the woods yet. But David Cutler seems to be having some sort of a conversion too…)

But what’s really amazing is that after years of writing mostly nutty stuff about health care that caused Brian Klepper to wear out his keyboard writing protests, in perhaps the most health care articles in one issue ever of the NY Times on Monday you could also read about:

Why patients couldn’t trust information from other patients and should blindly do what their doctor says (not too bright an article, as the doctor is often wrong as RAND knows)
Whether WebMD’s stock is a good buy (Probably)
mandatory health insurance–why an individual mandate is hard (a not bad job of explaining the basics of risk pools, but ignoring the easier way of doing it through the tax system–although I preferred my interview with John Kingsdale who features heavily in the NY Times piece)
that putting in an EMR is very expensive for doctors and doesn’t necessarily pay off (Duh! But probably important given the stress on IT in many health policy plans); and,
that a human life is worth something–a not-bad introductory article on cost benefit analysis in health care although in all its explanations on what a life-year or even a QALY is, it never mentioned the most useful number–how much a human might earn in a year. That number is of course how the rest of the economy values a human life, and sadly folks it’s much lower than what health economists like David Cutler likes to use.

But the big picture is that by my count that’s six in depth analysis articles in one issue of the NY Times about health care, four of which introduce relatively sophisticated concepts in a not-too dumb fashion. My friends, this is what we call progress!

And just perhaps this health care stuff might be important?

POLICY: Uninsured in LA? Want to tell the BBC?

Jun 11, 2007• 8

A BBC reporter called me looking for uninsured people in the Los Angeles area to tell their story. Is that you? Want to be a star on radio in the UK? You have to be in LA, but if you want to tell your story contact her directly. Regan Morris 323 467 4134 or cell 323 828 6852

POLICY/TECH: AP exposes Gingrich, well sorta

Jun 11, 2007• 4

The AP says that Newt’s Center for Health Transformation is a front for companies that want him to promote their points of view and that he’s doing it for the money. Well first this is not exactly news–and Newt has had his ethical issues over the years.

But for some time I’ve been wondering exactly what paying Newt 200K a year gets Sutter et al.. But I think I know the answer and it’s not that he mentions nice things about his members in op-eds or generally promotes things in public that might help them, nor is it that his group is delivering completely compelling research. At least if it is, it doesn’t come up much in his speeches. Maybe ol’ Newt just still have a little pull as a non-official lobbyist, per chance? Although a little less so since last November.

TECH/POLICY: Obama–looking to Neal Patterson for a contribution?

Jun 11, 2007• 2

I was called by the LA Times for a comment on whether increasing access would increase cost. After giving my standard lament about how no one talks about the real underlying problem of practice variation and waste (or at least about the political realities of dealing with it) I thought I should spend a bit of time seeing if that was true. And the answer is that, if you read deep into his plan, Obama does talk about that—although he doesn’t go after a solution quite yet. He instead proposes some intermediate solutions. more disease management, better care coordination, and more spending on health IT. In fact, a lot more spending on health IT:

Obama will invest $10 billion a year over the next five years to move the U.S. health care system to broad adoption of standards-based electronic health information systems, including electronic health records. He will also phase in requirements for full implementation of health IT and commit the necessary federal resources to make it happen.

All you need to know is that health IT is roughly a $30 billion market now. Obama wants to pump it up another 25%. I assume Neal, Judy, Pam Pure et al have their checkbooks out! And now I know why Glen Tullman is such a big fan (Just kidding, Glen!)

Actually to suspend my cynicism, I’m now among the converted and I think that this type of national program is a good idea, so long as it’s done in conjunction with a significant change in incentives. We’ll see how it shakes out as these proposals all develop.