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Tag: Robert Laszewski

Private Medicare plans face uphill battle to prove efficiency

I have been struck by the optimism regarding private Medicare presented by health plan executives during the recent earnings season and the analysts failure to press them on just how their numbers will add-up to sustain the long-term viability of a private Medicare strategy.

The typical private Medicare health plan operates on a medical cost ratio in the mid-80s. Let’s assume 86% for medical costs and the remaining 14% for overhead, profit, and taxes.

Government-run Medicare operates on about 3% overhead. One can argue that many federal Medicare costs are paid for elsewhere but that is the number the private plans have to compete against. So private Medicare plans spend 14% on overhead and Medicare charges
itself 3% — that’s an 11% disadvantage for the private market right
out of the box.

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Sarah Palin’s limited health care record staunchly free market

Republican vice-presidential candidate Sarah Palin has very little on her health care
policy resume from her short time in office as Alaska’s Governor but what she does have fits right in with Senator McCain’s strategy to use the market more effectively in bringing down America’s health care costs and improving access to the system.Palin

Her health care efforts have focused on two things in Alaska:

  • Eliminating the 1970s era strategy of requiring providers to file Certificate of Need (CON) applications before being able to build more health care facilities.
  • Providing consumers with more information.

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Voters shielded from high health costs don’t see the residual impact

The health care issue has a history of being named by voters as one of the biggest problems we face — until the problem de jour comes along and pushes it off the list. In 2008, that seems to be happening again with the economic downturn, the mortgage mess, and $4 gas surpassing health care as the big issues.

When asked to name the most important financial problem facing families today by the Gallup organization:

    * 29% said energy and gas prices    * 18% said the high cost of living and inflation    * 14% said a lack of money and low wages    * 9% said health care costs

Policy experts can point to the high cost of health care but Joe and Mary Middle- America are still clearly sheltered from the real impact of these costs largely by the employers who still provide so many of us with affordable health care.

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The problems with high-risk pools

What do we do with people who are uninsurable because they have a pre-existing medical condition?

That is a particularly important question as both McCain and Obama propose reforming American health care by building on the private health insurance system.

One of the solutions being discussed–by McCain among others–is to use state-based risk pools. Under McCain’s plan heavily dependent on an individual platform, people who don’t have employer-based coverage and healthy enough to qualify for individual health insurance could get a private mainstream plan and people who do not qualify for a standard individual plan could buy into a state-run high risk pool for the uninsurable.

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Cost containment is the missing link in Obama’s health plan

Barack Obama’s health care plan follows the Democratic template—an emphasis on dramatically and quickly increasing the number of people who have health insurance by spending significant money upfront.

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The Obama campaign estimates his health care reform plan will cost between $50 and $65 billion a year when fully phased in. He assumes that it will be paid from savings in the system and from discontinuing the Bush tax cuts for those making more than $250,000 per year.

That the Obama health care reform plan would cost between $50 and $65 billion a year is highly doubtful. Obama claimed his plan was nearly identical to Hillary Clinton’s and her plan was projected by her to cost more than $100 billion a year.

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Doubtful McCain’s health plan would accomplish any real cost savings

John McCain is now the presumptive Republican nominee for president. As a result, what he thinks about health care policy will be out front in the presidential campaign this fall.

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McCain’s thinking couldn’t be more different from Democrat Barack Obama.McCain very rightly points to health care costs as the biggest health care issue. "We are approaching a ‘perfect storm’ of problems that if not addressed by the next president will cause our health care system to implode," he has said.

Therefore, his focus is on the health care costs that make health insurance so expensive that many individuals can’t afford it for themselves, employers can’t afford to provide it to their employees, and government can’t afford a wider safety net for the poor and long-term solvency for senior benefits.

He also reminds us that costs can’t be improved without dealing with quality in tandem.

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Already counting down to the next physician fee cut

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. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog.

Is the "medical home" a real solution?

Now that this year’s fight over Medicare physician fees is all but over, it is important to turn to real solutions.

The recent Senate and House vote to kill the 10.6% physician fee cut only defers the problem for 18 months.

On January 1, 2010, the Medicare physicians are slated to get an automatic 21 percent fee cut!

More importantly, the Medicare physician fee structure is grossly out of whack with primary care docs starving under the current fee system.

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Senate votes to reign in private Medicare

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. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog.

Ted Kennedy came to the Senate floor and led Senate Democrats to an amazing victory in their first real attempt to rein-in private Medicare spending and rescind the 10.6 percent physician fee cuts.

The veto-proof margin puts President Bush’s threat to veto the Senate bill, which was approved by the House on another veto-proof 354-59 vote just before the holiday, in doubt. Why bother?

I was not surprised to see Senator Kennedy on the floor.

This vote was not about the doc cuts. It was about Medicare and its future. The doc cut was just the leverage Democrats were using to get at the private Medicare program.

Medicare is part of the Democratic legacy, and it is at the core of the Kennedy legacy.

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If California can’t protect consumers, who can?

Crazy as it sounds an Associated Press story from Thursday reported that the California Department of Managed Care "didn’t even try to enforce a million-dollar fine against health insurer Anthem Blue Cross because they feared they would be outgunned in court."

Last year, the department announced that it would fine the insurer for improperly rescinding individual heath insurance policies in the midst of the California rescission controversy. Since then, most insurers have announced policy changes in the way they rescind coverage.

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Run for the hills: the doctors are coming

What is the one thing no human being should want to be next week?

A Republican Senator at a Fourth of July Picnic.

In the most amazing turn of events I have seen in 20 years of following health care policy in Washington, the Democrats have the Republicans backed into an awful corner over the issue of the July 1st automatic 10.6% Medicare physician fee cut and corresponding private Medicare cuts to pay for nixing it. Also at stake is another 5% physician fee cut set for January 1, 2009.

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