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POLICY/POLITICS: Econ 101

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I’m up at Spot-on taking explaining very basic economics to the unwashed masses in a piece called Back To School, Business Week and no I didn’t get to choose the title. The main point is that health care is not infrastructure nor is it manufacturing. It’s a service industry, like teaching English Lit.  Come back here to comment.


There’s been a lot of fuss in the last week about the BusinessWeek article that suggested that all employment growth in America in the last year had come in the health care sector.
Well that’s not too surprising. The money pouring into health care has
been going up at more than 10% a year since 2000 while the rest of the
economy has been relatively stagnant (at least compared to
historical growth rates). The non-employment sector of the economy
(i.e. corporate profits) has been growing much faster than the labor
sector. Health care, though, is a labor intensive business – you need
those nurses, techs, and even doctors to look after patients. Continue …

POLITICS/POLICY: Shock-Horror–I almost agree with Arnold Kling

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Arnold Kling responds to Moulitas’ (DailyKos) overture to the Libertarians in a piece called Dear Libertarian Democrats… The only slight flaw in all this is that there aren’t very many libertarians, but then again we don’t need too many Republican voters to change sides!

Kling proposes running school choice in a few states and single payer health care in a few states. The only flaw here is in thinking that they’re much different. After all single payer health care in the usual American sense means putting all the money in one social insurance pool and allowing people to choose which doctors and hospitals they go to. As far as I can see school choice in Kling’s version is the same: creating one pool of all K-12 education dollars and letting kids/parents choose the schools they want to go to. In both cases everyone needs to be in the same pool, and the money follows the choice of the individual. I don’t understand how the libertarians can decry one as evil socialism while being OK with the other, unless they really favor repealing universal compulsory education. But maybe they do!

As for the health experiment, it probably depends where they run single payer. But the likelihood is that a really effective single payer plan run across state lines would be a wash. It would attract old school industry (autos) who would get rid of their “obligations” on the state, but it would also attract entrepreneurs suffering from job lock. It might lose jobs from employers with younger than average workforce, but theoretically it’ll be a wash. While single payer may not be the best option for financing health care delivery, and while a universal voucher scheme like educational choice may work too, a compulsory universal single insurance pool is by far the best option.

 

 

HEALTH PLANS: Medicare Advantage–risk adjustment is the real key

John Caroll (a fellow “Fierce” editor, not that I’m one any more) gives private Medicare plans a rather soft ride and shows that appparently it’s all looking good for Managed Medicare!"The trajectory for managed care is very good," says Mark McClellan, MD, PhD, the director of the Centers for Medicare & Medicaid Services, in an interview with Managed Care (as this story hit the presses, McClellan announced his plans to retire from CMS). He bullishly points to big gains in Medicare Advantage enrollment, new enlistees in the prescription drug plans, and bigger benefits ahead for coordinating care for the sickest beneficiaries as positive indicators of what’s to come.Medicare reform has fundamentally changed the way this market works for managed care, says McClellan, pointing to a benefit package that combines a drug benefit with preventive care incentives and the rest of the traditional benefits into "a package that Medicare Advantage plans can really excel at."

 

No shit Sherlock. We stick a huge extra amount in the kitty for private managed care plans, and what did we expect? However, we’ve seen this movie before and we know that a) overall this costs MORE for the system, and b) when the supernormal profits go away, so does the frothiest private sector interest. In the mean time luckily only the tax-payer/Chinese central bank gets screwed.

The question is what happens when real risk adjustment cuts in. Then we’ll see if Medicare Advantage can sustain itself and <gasp> innovate in terms of improving care delivery at a lower cost. I hope so, but put me down as a skeptic.

POLICY: The New York Times cannot leave its pustilent sore alone!

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This one is absolutely beyond belief. This time the dog is licking its sore raw and just cannot stop. Two boneheaded articles based on Cutler’s work have run in the NY Times in the last few weeks, and required such smacking down that Joe Paduda gave me the headline Matt 1, NY Times 0. Meanwhile the NY times got a boatload of letters criticizing the second of them.

But does that stop them? Oh, no. Today a libertarian blogger who’s a professor from George Mason University, which prior to today was best known for its basketball team’s Cinderalla NCAA run last year, gets given a full column in the nation’s paper of record in which he actually says that the “American health care system may be performing better than it seems” because our scientists win more Nobel Prizes than those foreigners do! And we have more innovation in developing new treatments here! And more so that because we’re spending more money on health compared to those evil European systems that restrain costs, this is, wait for it, “saving lives.” Yup, apparently while it might look sensible to make an effort to restrain health care costs:

In the short run, this would save money but in the longer run it would cost lives.

Oh, and we’re also doing more tests, procedures and visits with specialists because this is what people want!

If we count “giving people what they would want, if they knew it was there” as one measure of medical value, the American system looks better.

If wing nuts like this want to spout complete garbage on their loony-toons blog, well he has a first amendment right to do so. After all, other than 40 years of health technology assessment research on innapropriate use of medical technology, the Dartmouth/Wennberg school showing massive variation in care where more care leads to worse outcomes, and the IOM reports that show 100,000 annual deaths from medical errors largely from inappropriate overuse of technology, and 20,000 annual deaths directly from being uninsured, there’s almost no evidence he’s wrong!

But why the hell is the NY Times deciding that it must launch this last ditch defense of the American health care system? I think we should be told.

Otherwise they should give an entire week over to rational critics of the system, starting with Jack Wennberg.

UPDATE: The Michigan Independent thinks as I do, but is slightly calmer and performs the line by line rebuttal that I just couldn’t bear to do

The Great Balance Billing Scandal By Eric Novack

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Novack_sm_2In California, the possibility exists that the unelected
department of insurance, under pressure from the insurance industry and
patient advocacy groups, may fundamentally alter the way medicine is
practiced. In an effort to get a work around the
disgraceful- yet very culturally sensitive- single payer bill recently
vetoed by Governor Schwarzenegger, there is a move afoot to ban the
practice of balance billing.
 
What is balance billing you say? Sounds very wonkish and unimportant. Sounds like those unethical, over-utilizing, quality-unconcerned doctors are just trying another technique to scam the ‘system’. (But I thought the familiar refrain is that we do not have a health system? …) I will explain with an example.

Continue reading…

PHARMA/POLICY: U.S. Drops Program to Halt Discount Drugs From Canada

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U.S. Drops Program to Halt Discount Drugs From Canada

The federal government plans to halt a controversial crackdown on discount drugs mailed from Canadian pharmacies to U.S. customers, removing a significant hurdle to Americans buying cheaper medications from abroad.

So 80% of Seniors support importing Rx from Canada, and the DOJ backs off its crackdown on imports.

Could there just possibly be an election coming up soon? Just possibly, could these two events be related?

TECH:….and talking about 1999 again

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Aetna introduces a PHR for its members, only 5 1/2 years after sending me the funniest email of all time, which said that they were spending all their time fixing their IT system and even if the solution (a PHR) that we had for them would fix all their problems, they still couldn’t buy it for 2 more years. Well I guess they meant 5 more!  Sadly we were out of business well before the 2 years expired!

Their PHR is an off shoot of Active Care Management’s Care Engine. Aetna bought ACT last year. At that point Empire Blues was the biggest user of Care Engine. They didn’t go with it for their PHR though—they’re using WebMD’s version. Which makes me wonder how good Active Care’s version is. Perhaps I’ll be able to check into it soon and tell you.

Meanwhile all care will soon be delivered at home by clever in-home dialysis and monitored by Health Buddies. It must be true because it says so in Business2.0. Yes I know that’s an unfair slam on Health Hero Network (who I know and love), but their new direct to consumer model is, shall we say, a brave business innovation, given that it demands $50 a month from the chronically ill.

Good luck to them and I’m sure they’ll keep me appraised on the models success while the rest of us are waiting for Medicare funding for remote monitoring.

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