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Tag: Health Care Reform

Bernie Madoff Accounting for Medicare

On the eve of the release of this year’s Medicare Trustees report, the Obama administration released its own version of it. In the administration’s telling:

  • Health reform (ObamaCare) will save taxpayers $200 billion in the Medicare program through 2016.
  • About 90% of these savings will be produced by lowering “excessive payments” to Medicare Advantage plans, lower payments to doctors, hospitals and other providers to reflect their “improved productivity,” and through efficiencies gained by what is learned from “demonstration projects.”
  • The demonstration projects include pay for performance, bundling, Accountable Care Organizations, and other frequently discussed ideas.

But whereas the Trustees report is expected to be a serious document, reflecting accepted accounting principles, the administration’s document was clearly a piece of political propaganda — one that stretched the truth so much that the word “spin” would be a charitable description. For example, the administration’s document failed to mention that:

  • The Congressional Budget Office has studied the demonstration projects on three separate occasions (here, here and here) and each time has concluded that they are producing no serious savings and are unlikely to do so in the future.
  • Medicare’s Actuary has determined that reductions in payments to Medicare Advantage plans will not only result in lower benefits for the one in four seniors who are in these plans, but that about 7 ½ million enrollees will actually lose their coverage and have to seek more expensive Medigap insurance elsewhere.

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No Panacea for China’s Healthcare Reform

Not since the earliest days of Deng Xiaoping’s reforms of the iron rice bowl in the 1980s has China faced as great a need for change as the leaders currently face.

Then as now, the government in Beijing recognized a pressing need to reform the means by which social services were provided. But unlike then, today’s reforms must occur in the midst of a society that has already experienced significant economic growth and has already gone through a painful opening of formerly public services to private competition.

For most Chinese, while their economic futures have materially improved since Deng’s painful reforms were enacted, their access to healthcare has actually deteriorated, a point Yanzhong Huang, the Senior Fellow for Global Health at the Council of Foreign Relations, has made eloquently in his recent research.

Beijing’s struggle to reform its healthcare system brings political concerns, social issues and business pressures together on a collision course. While the need for government and industry to collaborate on these matters is obvious, whether China’s pressing concerns in this area will allow it to do so remains to be seen.

The ever-present temptation in China, to simply resort to government-mandated policies absent industry’s guidance, is one the country has already given into at a national level relative to clean technology, and at a provincial level through the Anhui pharmaceutical pricing model.

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Is There a Republican Alternative to ObamaCare?

GOP to the Uninsured: (Feel Free to) Drop Dead.” So reads the title Michael Millenson post at the Health Care Blog yesterday. It gets worse:

[N]o Republican presidential candidate has ever presented a serious plan to cover all the uninsured … The difference between Democrats and this generation of Republicans — unfortunately including even the GOP Doctors Caucus — is not at its core a disagreement on what government can legitimately do to help create universal access to health care for the 50 million Americans without it, but whether the goal itself is worth pursuing.

Was Millenson completely asleep (like Rip Van Winkle) during the last election? Does he not read my Wall Street Journal editorials? Does he never visit my blog? Or was this meant to be an April fool’s column?

John McCain’s health plan was more radical and even more progressive than Obama Care. I’ve never seen any serious health policy wonk deny that.  Maybe Millenson doesn’t live in a battle ground state. If he did, he would know that the Obama campaign spent more money attacking the McCain health plan during the election than has ever been spent for or against a public policy idea in the history of the republic. In fact, it is probably no exaggeration to say that Obama successfully turned the election into a referendum on the McCain health plan!

The McCain health plan is discussed at this blog here, here, here, here and here.

And although Millenson singles out Oklahoma Senator Tom Coburn as an especially egregious example of the Republican failure on health policy, the McCain vision actually was based on a bill, sponsored by Sen. Coburn and Sen. Richard Burr (R-NC), along with Reps. Paul Ryan (R-WI) and Devin Nunes (R-CA), [hereinafter called the Coburn bill]. That bill, in turn, was based on an idea which Mark Pauly and I proposed in a Health Affairs article more than a decade ago. (Does Millenson not read Health Affairs?)

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Scrapping Obamacare Would Be an Rx for Chaos

Sharp questioning in oral arguments before the Supreme Court raised serious questions about whether the “individual mandate” — the requirement that people carry health insurance — will survive.

At issue is Obamacare’s central requirement that every American buy health insurance or pay a penalty. Critics say this is an unprecedented expansion of federal power — that if the government can force people to buy insurance, it can force them to buy anything.

Supporters, including me, say the mandate is just a logical extension of federal authority to regulate this market — a market that everyone eventually participates in at one time or another. We also know that if the mandate is struck down chaos is inescapable.

Under one scenario, the court would invalidate the requirement while leaving the law’s many other rules and regulations in place.

In that event, insurance companies would have to insure anyone who asked for coverage — but they would be barred from charging premiums equal to a best guess of what the new customers will cost.

Limiting how much insurers charge can work, but only if the mandate is in place — if everyone, the healthy as well as the sick, has to have insurance. It can’t work if people can go without insurance until they get sick and only then call up their friendly insurance broker and say “Cover me.”

So, Congress would have to do something. But what? One option would be to repeal the parts of the law that the Supreme Court left standing. Finding the votes to repeal the health reform is unlikely, as the next Congress is almost certain to be closely divided.

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If the Supreme Court Overturns the Individual Mandate


First, trying to predict how the Court will rule is at best just speculation. I know what Justice Kennedy said both today and yesterday and it certainly doesn’t look good for the Obama administration and upholding at least the mandate.

But I will remind everyone, based upon oral arguments, most Court watchers expected a ruling in favor of the biotech industry on a recent case involving health care patents. “Surprisingly,” the Court ruled against the industry.

Whatever the justices are now thinking, there isn’t a lot anyone could do differently until we actually get a ruling and know exactly what gets thrown out, if anything, in the 2,800-page law.

But if the mandate is overthrown, then what?

First, exactly how the Court rules on severability will be critical. What could go out with the mandate?

The Obama administration has smartly tried to build a firewall around the rest of the Affordable Care Act (ACA) by arguing before the Court that only the insurance reform elements of the bill should fall if the mandate goes down—that the mandate is only the quid pro quo for the insurance industry in exchange for taking all comers. That looks to me like the most logical outcome of overturning the mandate—but my perspective is one of an insurance veteran not a Court expert.

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Health Insurance Exchanges: What to Do During the Waiting Game?

Being in limbo is never a good feeling – it’s in our nature to make decisions, feel comfortable, and find solid ground. So many state leaders may be feeling uncertainty and hesitancy now, as they weigh the pressure to move forward with building a health insurance exchange with the knowledge that the Supreme Court will soon weigh in on the future of the regulations. As my peers have pointed out recently, states are taking different approaches to handling being in limbo. Some are moving forward with confidence, some are testing the waters, and others are doing nothing – determined to wait and see.

One thing is certain, however – there is an opportunity for states to examine how to best use technology and solutions to serve people, regardless of how the regulations play out. As the researchers at Urban Institute point out in this New York Times article by Robert Pear, the states currently making the least progress toward an exchange are actually the ones that could benefit the most from an Exchange, because they have large numbers of uninsured residents.

States can move forward now with the following considerations, which will be helpful in either the event that the health insurance exchange mandate is upheld and they are asked to move forward, or in the event that they have more flexibility, but still need to use technology to best serve their citizens.

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Health Reform: Still the Best-Covered Social Policy Story, Ever.


Two years ago, I put myself in hot water by making the simple (admittedly somewhat hyperbolic) claim:

Because it is so easy to find bad reporting and public stupidity, it is easy to overlook something. Press coverage of health care reform was the most careful, most thorough, and most effective reporting of any major story, ever.

This column appeared on April Fools’ Day. Some readers didn’t quite believe that I was serious. I was. Others were simply horrified. Allison Kilkenny, writing in the Huffington Post, typified the reaction among frustrated left-of-center commentators who had just witnessed the “death panels” debacle, the demise of the public option, and similar depressing episodes: “Harold Pollack went out on a limb, and unfortunately fell off the edge.” Andrew Sullivan said something similar.

The Columbia Journalism Review’s Trudy Lieberman was more brutal:

Last week, The New Republic turned over its health care blog “The Treatment” to an odd commenter on media coverage—University of Chicago professor Harold Pollack, who runs the university’s Center for Health Administration Studies. I thought I knew most of those who dabble in these waters, but Pollack’s name took me by surprise. Pollack, a special correspondent for The Treatment, may know something about welfare programs and substance abuse, but we on Campaign Desk take issue with his credentials as a press critic and dispute his central point….

Better coverage than the Vietnam War; the civil rights movement; the consumer movement? Really? In the case of the civil rights struggle, the press helped change the discourse; Americans began to view race in a new way, which led to the eventual passage of the Civil Rights Act. During the Vietnam War, the media effectively changed the public dialogue from a war we couldn’t lose to one we could not win. In the early days of the consumer movement, media coverage of Ralph Nader led Congress to enact significant consumer protections. Coverage of health reform has hardly risen to that level.

Losing one’s credentials as a “press critic” is a particularly low blow. The only thing worse would be to lose the moniker “Democratic strategist” on the cable talk circuit. I appreciate where Lieberman is coming from, but I think she missed my point, which was actually intended to be sobering.
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Healthy Competition

While there are important differences between the NHS and the US health system, both face similar challenges in improving productivity and disrupting the traditional model of healthcare that is no longer fit for purpose. Both are facing rising demands of an ageing population, increasing prevalence of chronic conditions and consumer expectations. Both systems have powerful incumbent providers such as general hospitals that are not always responsive to changing patient and system needs. As Elizbaeth Tesiberg and many others of both sides of the Atlantic have argued, “innovation is the only long-term solution to high-quality, affordable health care.”

Leading pioneers from around the world are already transforming healthcare. In its recent report, Healthy competition, the London based think tank Reform, highlighted a number of case studies of successful change. Reform explored four crucial areas that can improve productivity in healthcare: service reconfiguration, integrating care, standardisation of processes and procedures, and measuring and publishing outcomes.

Greater patient safety through service reconfiguration

Successful reconfiguration has achieved higher quality and greater value for money. In Finland, the Pirkanmaa region closed joint replacement departments in five hospitals and concentrated care at one specialist hospital.  The new hospital delivered complication rates below 1 per cent compared to an average of up to 12 per cent for general hospitals. The NHS in London moved emergency stroke care from 34 general hospitals to eight specialist units with dedicated staff. London now has the highest standards of stroke care of any major international city.

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Where Have All the Liberals Gone?

There are two conservatives for every liberal in America. That’s the message of a recent David Brooks column as well as a Gallup survey. I think the imbalance is much starker. I would guess there are four conservatives for every liberal. Maybe even more.

Here’s a test I invite you to take. Watch C-Span’s morning call-in show and listen to what people who phone in on the “Democrat” or “liberal” line have to say. When is the last time you heard a caller say, “We should all pay higher taxes so that the government can provide us with universal day care”? Or how about, “We should all pay higher taxes so the government can provide us with universal long term care”? I bet you can’t remember ever hearing that.

Here is what I suspect you will hear: Teachers complaining that teachers aren’t paid enough. Union members complaining about competition from workers overseas. Senior citizens whining about the meagerness of Social Security or Medicare benefits. Minority callers advocating more affirmative action. What is the common denominator of these comments? Self-interest.

Yes, I know. Special interests are in both parties. Why wouldn’t they be? Yet as I wrote in my analysis of “progressivism,” the left in America has elevated special interest privilege to an art form.

Here’s the point: people wanting more, more, more are just people pursuing their own self interest in politics. They are not in principle different from any other special interest group. Importantly, they have nothing in common with what we normally have in mind by the term “liberalism.”

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The Creative Destruction of the News Business and Other Weird Stories

Health system CEOs would be well advised to study what newspaper industry leaders did (or perhaps more appropriately, didn’t do) when faced with a dramatic industry change. Turn back the clock 15 years and the following dynamics were present:

  • Newspaper leaders knew full well that dramatic change was underway and even made some tactical investments. However they didn’t fundamentally rethink their model.
  • Newspapers were comfortable as monopoly or oligopoly businesses allowing for plodding decisions. Their IT infrastructure mirrored the plodding pace with expensive and rigid technology architectures.
  • Newspaper companies bought up other newspaper chains and took on huge debt.
  • Owning printing presses was a de facto barrier to entry allowing newspapers unfettered dominance.
  • Depending on one’s perspective, it was the best of times or the worst of times to be a leader of local media enterprise.

Before they knew it, owning massive capital assets and the accompanying crushing debt became unsustainable. The capital barrier to entry transformed into a boat anchor while nimble competition dismissed as ankle-biters created a death-by-a-thousand-paper-cuts dynamic. Competitively, newspaper companies worried only about other media companies or even Microsoft, but their undoing was driven by a combination of craigslist, monster.com, cars.com, eBay, and countless other marketing substitutes for their advertisers. In addition, there were easier ways to get news than newspapers. Generally, the newspaper’s digital groups were either marginalized or unbearably shackled so that the encumbered digital leaders left to join more aggressive competitors. The enabling technology to reinvent local media didn’t come from legacy IT vendors who’d long sold to newspaper companies, but from “no name” technologies such as WordPress, Drupal and the like.

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