Tag: Health Care Reform

Sell Patients like Baseball Players – Seriously

Nov 16, 2009• 37

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?

The Outlook for a Health Reform Bill in 2009

Nov 15, 2009• 2

Congress Readers know of my year long pessimism over our getting a trillion dollar health care bill in 2009.

With the historic passage of the House bill, are we now on our way to a big health care bill in 2009—or even by early 2010? Clearly, Democrats desperately want to pass a bill. Given their compromise over abortion and the neutering of the public option in the House legislation—things most liberals said they would never agree to—it is clear the Democratic leadership will take any deal they can get.

But there are still some giant obstacles on the way to a Rose Garden bill signing late this year or early next:

Getting and keeping 60 Senate votes across a wide spectrum of complex issues. Senate Majority Leader Reid has not achieved a 60-vote consensus on any of the dozen or more contentious issues. In the wake of Pelosi not being able to get more than a two-vote margin for the neutered public option, some Democratic Senators will have no interest in the “robust” version with the state opt-out Reid has been talking about. He has made even less progress on all of the other contentious issues–and you can put abortion on the top of that list. Figuring out the “sweet spot” on each issue that keeps the same 60 votes on side for the entire bill would take a super computer—if that were even possible. The growing angst over these health bills not bending any cost curves and actually getting the savings from Medicare that is projected. With the demise of the robust public option even a lot of “sympathetic voices” are having second thoughts. How many op-eds and editorials can you have announcing this is not health care reform and it is likely to continue adding to deficits before everyone wants out?The latest blow was the report from the CMS actuary that says Medicare beneficiaries will suffer from the program cuts in the bills and health care costs will more likely continue to add to the deficits. I expect opponents are cutting new ads using the CMS report against the Democratic bills at this moment.
The polls are still showing opposition well ahead of support for the Democratic bills. Pollster.com combines a number of polls finding 42.5% favor and 48.6% oppose. How do you pass so big a piece of legislation with approval ratings in the 40% range?

If Reid finds a way to keep 60 Senators onside it will be an example of a political master performance. If he fails it will be the more likely outcome.

More than anything else, I sense a rising tide of anxiety particularly among people who understand this issue and want a health care bill: Somewhere we lost our way on the road to health care reform and we now find ourselves headed to an entitlement bill that falls far short of achieving universal access and a bill we still can’t afford. This will eventually spill over to mainstream voters already anxious about a trillion dollars in new spending in the midst of an economic crisis.

That is not the place Democrats would have wanted to be just when they need to overcome what would have been stiff resistance under the best of all circumstances.

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. Before forming HPSA in 1992, Robert served as the COO, Group Markets, for the Liberty Mutual Insurance Company. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog, where this post first appeared.

Intermountain – Proof That U.S. Hospitals Can Improve

Nov 10, 2009• 23

By MAGGIE MAHAR

I urge everyone to read this story by David Leonhardt in this Sunday’s (November 8) New York Times. (Thanks to reader Lisa Lindel for spotting it. )

Leonhardt profiles Intermountain Healthcare, a network of hospitals and clinics in Utah and Idaho that President Obama and others have described as a model for health reform.

Leonhardt concludes:

“If you simply looked at Intermountain’s overall results — the good outcomes and low costs — you might be tempted to dismiss them as a product of the environment. Utah has the youngest population of any state, as well one of the lowest rates of alcohol and tobacco use. More than half of the state’s residents are Mormons. This homogeneity creates a noticeable sense of community, even a sense of mission, among many Intermountain doctors and nurses.Continue reading…

Are We Too Small to Succeed?

Nov 9, 2009

By DON LINDSTROM

The logic behind the government bailouts in the financial and automobile industries goes like this: some institutions are so large and interconnected that their failure could collapse the entire economy. They are considered to be too big to fail. The notion of too big to fail implies its opposite, that some individuals and businesses are too small to succeed. Of course, that includes most Americans.

Author, commentator, and former Republican strategist, Kevin Phillips, uses the near economic collapse to illustrate current reality regarding American values. He calls the government bailouts welfare for the financial sector. Conversely, he points out that whenever topics like universal health care or national pensions arise, they are invariably described as too expensive or socialistic. The same arguments were made about the bailouts, but they did not prevail. Thus, we can afford to bail out large corporate entities in self-made crises, but we cannot afford a basic level of health care for all Americans. This has been true for nearly a century. Prior to the Great Depression, government took a hands-off approach to economic bubbles, allowing the ‘invisible hand’ to work its magic. Since that time, government has taken a hands-on approach to economic crises. In the current case, everybody must pay for the greed of a few, some of whom continue to be rewarded for their behavior. The invisible hand seems to have become the visible finger.

In contrast, universal health care has been proposed and defeated repeatedly over the past century (in 1915, 1935, 1948, and 1994). With the exception of the old and the infirm (Medicare) and the young, the disabled, and the poor (Medicaid), we as a society have not defined health care as a public good like education or police and fire services. The Social Security Act of 1965 that created Medicare and Medicaid is attributed to the masterful legislative skills of LBJ.

Unlike comedian Jack Benny, our leaders don’t have to think much about the question, “Your money or your life?” With the exception of the SSA of 1965, financial security (money) has always trumped health security (life). In effect, the acute condition (economic crisis) gets action while the chronic condition (health insecurity) does not.

For those with health insurance who have not tested its boundaries, health care is not a crisis. It might be costly. It might be time consuming. It might be infuriating to navigate the insurance and health care labyrinth. But it’s not a crisis. It will probably take a catastrophe like the collapse of the safety net hospitals before universal health care becomes public policy.

Many Americans believe the fix is in, the system is rigged. A friend refers to members of Congress as “the whores in Congress” and suggests they should wear sponsor patches like those worn by NASCAR drivers. To be fair, we the people don’t seem to have a problem with outsourcing political campaigns to the private sector. That’s the game we allow to be played in Washington.

If health care were a product, this would be the current offering. Pay twice as much as other industrialized countries, waste 30% to 40% of that payment due to a highly inefficient system, get lower overall quality (33% less value in terms of outcomes), cover only 80% to 85% of the population, and put 15% to 20% of those with insurance at risk financially if they fully use the product. According to the Business Roundtable, this product puts American business at a competitive disadvantage globally.

One wonders if Yankee ingenuity has died or has simply been co-opted by a collection of balkanized special interests. If we Americans are unable to create a sensible health care system out the current mess, we really are too small to succeed.

Don Lindstrom is a business strategy consultant. His firm recently recommended a redesign of the Florida Medicaid program. He can be reached at do*@**************nc.com.

Modest step in the reform journey shows the idiocy of our political system

Nov 8, 2009• 14

By Matthew Holt

It does seem to take a health care bill to remind us all how incredibly screwed up the political process is in these here United States. The Medicare Modernization Act was railroaded through by Tom Delay and friends using all their charm and finesse. And last night the House passed its version of the health reform bill. It includes employer mandates, exchanges, subsidies, public option and taxes on those earning more than $500,000 to close the cost gap. And CBO in its wisdom says that it doesn’t increase the deficit.But it didn’t pass by much. 40 Democrats opposed it. These were the Blue Doggers who needed some political cover to be able to say in 2010 that they were against the bill before they were for it. Their expected course of action is that a less liberal bill comes back from final conference with the Senate which they can support. Apparently out there in purple state land uninsurance and egregious health plan behavior are not a problem—at least not compared to the desire of the people to protect the incomes of those earning over $500,000 a year.

But in order to stop even more Democrats opposing it at the last moment Pelosi had to let some previously unheard of Congressman called Stupak become the mouthpiece of the Catholic Bishops who decided that they needed to impose their views about reproductive medical care into the debate. Cynics like me may wonder about the validity of views on that issue from a bunch of old men who’ve allegedly never been married or had sex with a woman, and whose main contribution to child welfare over the past few decades has been to ignore and assist in flagrant abuses of it by their colleagues. But no matter, over recent days they started putting pressure on various Democrats to tighten restriction on Federal funding of abortion.Continue reading…

Why “free market competition” fails in health care

Nov 3, 2009• 32

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:

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…

A “Third School” of Cost Containment?

Nov 2, 2009• 6

By Bill Kramer

Is there a “Third School” of reformers that could help Bill Kramer us resolve the long debate about how to contain health care spending? Drew Altman’s recent column describes the history of the debate between the “Regulators” and the “Marketeers”, and he suggests that a new school of thought – the “System Reformers” – is in the ascendance. According to Altman:

The Systems Reformers believe that the best way to bend the cost curve is not through external market incentives or regulatory controls, but from the inside out, by creating a smarter health care system with the information base, new delivery models and payment incentives that will improve quality and lower costs. . . .

The Systems Reformers’ paradigm is reflected in the “bending the curve” elements of the health reform legislation currently in Congress, which mostly come in the form of pilot projects and experiments. These include tests of ideas like Accountable Care Organizations, “pay for performance” and “bundled payments,” as well as efforts to create a smarter, evidence-based health delivery system through comparative effectiveness research.

He describes the Systems Reformers’ approach as a “third leg of the stool of cost containment strategies.”

While Altman is right about the importance of the Systems Reformers’ ideas, I don’t consider this to be a new paradigm.

Why McAllen Should Have Mattered in the Health Reform Debate

Oct 29, 2009• 45

Jeff Goldsmith Back in June, Atul Gawande, a Harvard trained surgeon, published a riveting article in the New Yorker about the physician community in McAllen Texas. If ever an article was strategically timed to influence the nation’s health policy debate, this was the one. His story was accompanied by a graphic showing a patient as an ATM machine. President Obama read it and put it on his staff’s reading list. Yet, it’s depressing how little impact Atul’s article has had on health reform.

Atul’s purpose was to explain a major policy conundrum: why some communities manage to spend as much as triple on Medicare services as other communities. McAllen’s physicians practice some of the most expensive medicine in the United States, second only to Miami, and spend seven thousand dollars per Medicare beneficiary more than the national average. Peter Orszag has said that eliminating this type of variation could cut Medicare expenses nationally by as much as 30% and actually improve the quality of care.

A Bill of Rights for Health Care Reform

Oct 29, 2009• 12

Our nation’s Founders created a pretty good system of government by starting from what they wanted to achieve, exemplified by the Bill of Rights, so perhaps we would be wise to base health care reform on a similar footing. Instead, Congress is doing its usual muddled process to produce legislation that is likely to make no one very happy, but at least tries to minimize the number of people made very unhappy. As is too often the case, it is easier to create straw men to attack than to address the real problems. Insurance companies seem to be everyone’s favorite target to demonize, but the “evil” health insurance industry is like the various other players in the health care system: responding to the numerous and often perverse incentives in the current system. There are bad things done to people by insurance companies — as there are done by doctors, hospitals, government, and just about every other player in the health care system. There are both angels and demons working in health care, but mostly it is just normal people. Perhaps ninety-nine percent of the people working in the health care system try to do right by the people they serve, but “doing right” may not mean the same thing to different people.

Senate Health Care Reform: Two Huge Problems, One Giant Red Herring

Oct 28, 2009• 13

By ROGER COLLIER

Pity poor Senator Harry Reid. Not only is he facing an uphill reelection fight in Nevada, but as Majority Leader, he must reconcile the health care reform bills from the Finance and the Health, Education, Labor and Pensions committees so as to attract sixty Senate votes. He’s guaranteed support from the more partisan Democrats, but to attract Democratic and one or two Republican centrists without losing liberals, he has to find ways to deal with two huge problems with the bills—and one giant red herring.

The giant red herring is the public option, THE big stumbling block for reform, mostly thanks to the efforts of lazy-thinking doctrinaire politicians of both parties—especially in the House. (Yes, Speaker Pelosi and Minority Leader Boehner, I mean you.) The reality is that for a public option to provide an adequate network, its payments to hospitals and physicians must be at least at Medicare levels. As experience with Medicare Advantage shows, this means its costs will be close to those of private coverage or higher, especially if it adopts Medicare’s uncontrolled fee-for-service structure and attracts the least utilization-conscious providers and patients. All this makes nonsense of liberal claims that the public option is necessary to control costs, and equally, of conservative allegations that it will destroy the insurance industry—and leaves Senator Reid’s “opt-out” solution looking merely perverse.