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POLICY/PHYSICIANS: Is the Medicare reimbursement issue more serious this time?

This week things are starting to get a little serious regarding physicians’ Medicare reimbursement. The AMA is gearing up for a fight, trying to avoid a scheduled 4.3% cut in Medicare reimbursement. Meanwhile a survey of California doctors suggested that they would stop taking new patients at the lowered rates. Much of this is just bargaining rhetoric, but CMS is determined to start Medicare down the pay-for-performance road, and has already begun to initiate this process by paying hospitals for reporting quality measures (even though it’s less than 0.5% of their Medicare revenue).

Meanwhile Republican house rep Nancy Johnson is pushing a pay-for-performance bill which would change how physicians get paid. Anytime you put doctors, money, and quality and performance requirements in a sentence together, be prepared for at the least a vigorous debate. Medicare is still the big Kahuna, and where it goes other payers will follow — if they’re not moving there already.

THCB: Podcast question

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Did anyone download the podcast into their MP3 player?  If so did it download once or twice?  (I’m trying to figure out if there’s a slight problem in the code).  Any other comments please let me know, before I launch this as a regular feature.

And I’ll be the interviewee of a podcast soon for the Journal of Medical Practice Management…(and yes Ron I’ll be talking about high-deductibles and HSAs). Details when it’s out, but here’s the RSS feed if you want to point your aggregator at it..

THCB: The First Podcast–Erick Novack

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Here is THCB’s first podcast. You can listen to it here by clicking on this link — Eric Novack interview, and telling it to "open" when it asks you.  That should make the file play in your MP3 player of choice.  But the real idea is to get your iPod aggregator (I use iPodder) to move it to your MP3 player of choice, by aiming at the RSS feed here. And then get out of the house and still listen.

All I did was record an interview over Skype using Total Recorder and then had it saved as an MP3 file.  Once I saved that up to my hosting service (easy) I figured out how to put it in my RSS feed (much harder, or at least harder finding out how to). You can either point your podcast aggregator (like iPodder) at http://matthewholt.typepad.com/the_health_care_blog/rss.xml or you can get it by looking at the "Subscribe to my podcast" line next to the site feeds in the right sidebar.

Take a listen, let me know what you think.

PHARMA/POLICY: Part D Sponsors Brace for Intense Competition for Seniors

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And you thought that Medicare Part D was a big giveaway to the drug companies and PBMs…. 

Well this article in AISHealth.com’s Managed Care Week suggests that Part D sponsors are gearing up for intense price competition to recruit seniors and that the PDPs (participating drug plans) who will do best are those health plans that understand how to take risk.

That’s a little odd as my understanding of the PDPs’ role in part D for the first couple of years was that if they lost money the government would make up the shortfall. Of course if that’s not the case and they do lose money we could see a repeat of the stampede out of Managed Medicare of the late 1990s –not something the Administration would like to see given how confusing the Part D benefit is in the first place. To be fair I can’t find any references to who’s really at risk, and whether losses by plans will be covered if participants drug costs exceed their premium income.

If anyone does understand this, please add your wisdom into the comments! Here’s the official CMS site.

POLICY: Jill Quadagno on “A critical national competitiveness issue”

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The Oxford University Press in the US has its own blog. Who knew? As a Cambridge man I shudder at promoting anything from the dark blue side of the British divide, but Jill Quadagno (who’s book on why we don’t have national health insurance was reviewed by Jonathan Cohn and mentioned in this earlier THCB post) has written a piece on why she believes healthcare is a critical national competitiveness issue". I’m not sure I really buy that argument too much — the US is too strong in some industries and too weak in others for the 15% labor cost differential that health care makes to be too big a deal overall–although obviously it makes some difference at the margin as to where GM will put its next car plant. It does seem to me that their overall problem is that they stopped making great cars in 1969.

Cam69What is more important, I believe, is that a dollar spent on health care is a dollar not spent on education, alleviating homelessness, conserving energy, etc, etc (although apparently not one also not spent on invading Iraq, running a punitive war on drug users, or building more and more prisons) — so that we should be wondering why we are spending so much on health care, and wondering what we are getting for that spending.

And as I’ve said many times in THCB, the existence of uninsurance means that there is the opportunity for the health care system to force those who can’t afford it out of the system, and therefore enables the system as a whole to increase its costs without having to be concerned about the overall impact of this price effect. If there was some mechanism by which the extra costs were capped within the system, without the safety valve of uninsurance, life would be very different. And that’s why solving the uninsurance issue is also the solution to solving the cost issue.

POLICY/HEALTH PLANS: Stronger Rules Sought on Association Health Plans – Los Angeles Times

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Following up the post about the Shadegg legislation which would allow people to buy health insurance across state lines, the other shoe dropping in the Congress is the approval of Association Health Plans — legislation passed in the House and now en route to the Senate, which basically will allow associations of varying stripes and ethical fortitude to offer health insurance across state lines also without having to adhere to state regulations. These are descendants of the Multiple Employer Welfare Trusts of the 1980s, which were essentially a license to print money for organized crime.

Consumer groups in California are prepping for these early, trying to get their retaliation in first, and are finding a willing audience in Insurance Commish John Garamendi.

HEALTH PLANS: Fuzzy math from eHealthinsurance?

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I’m having no luck getting a reply from eHealthInsurance.com (albeit I’ve approached them in a rather roundabaout route via their sponsored blogger!) about this study they put out last week. They claim that people buying high-deductible health plans from their site found that compared to last year their premiums fell an average of $29 per month. Given that those plans are pretty cheap anyway, that’s a pretty big fall. And several people have emailed me or referenced this study. (More details here and the report itself is here [PDF]). But when did you ever hear of health insurance premiums falling when health care costs continue to rise?

On further review there are more questions than answers. Who got insurance? Was this group more underwritten (i.e. healthier) than the previous year? And what benefits were they getting compared to last year?  And were there changes in deductibles, co-pays and out of pocket maximums?

Just saying that the premium went down is a bit like saying the average price of a BMW 3 series is less this year on average because more people are buying them without the fully loaded options. And if it’s really true that apples for apples the premiums went down why didn’t eHealthinsurance.com put that information in the report?

Anyone who can shed light on this, please get in touch.

BLOGS: Podcast coming

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I had a very entertaining phone call over Skype with Eric Novack which I managed to record using my advanced technical skills….(i.e. don’t expect too high a call quality!).  This will become THCB’s first podcast very soon — in other words as soon as my technical skills extend to figuring out how to get it into my RSS feed.  I’ll also post it direct on the site for download. 

I will be having a similar conversation with Jonathan Cohn soon, and also I’ll be being interviewed for a future podcast by the Journal of Medical Practice Management, whose editor Kent Bottles has already notched interviews with Kevin Pho (KevinMD) and Sydney Smith (Medpundit).

um, err, if you know something about this podcasting lark and can help, please *******@*********lt.net“>email me, even if only to send me to the right website for information about "how to". Thanks!

If you have no idea what I’m talking about, look here.

POLICY: HSAs for Medicaid–cost-shifting to the poor by Theora Jones

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Policy analyst Theora Jones has been a little quiet at THCB lately, but the news that South Carolina is going to be giving all its Medicaid recipients HSAs got her a little riled up.

THCB recently pointed out that if the government could risk-adjust perfectly, we’d have no need for insurance companies, (Well I didn’t quite say that but close enough, MH) which is why this recent story from SC is so confusing–call me crazy, but I don’t think they’re out to replace the insurance industry.

So golly gee, what’s behind this? Does SC they think the private sector can control costs better? There’s no evidence of that. Do they think that people on Medicaid will get better care? Well, they’re not proposing any case management or disease management or quality measures, so…no. Wait, I think I’ve found the nut graph:

"South Carolina would cap how much it will spend on a recipient, and if health care costs more than the account will pay for, then the low-income people would have to make up the difference themselves or go without."

Ah, rationing. That’s neither new nor radical.

Please note that in order to qualify for Medicaid (2003 numbers), a mom in a family of three has to earn less than $7,510 a year. Disabled and blind folks have to earn less than $12,120 ($9k if they’re single). The old folks can pull down a cool $16,362, and kids can be covered even if their family of 3 is rolling in cash–up to $22,890! With disposable income like this, I’m SURE they’ll be able to make up the difference on that triple heart bypass. Or the asthma medication.

Legislation like this confirms my greatest fears–that HSAs are going to have a worse impact on the health care system than managed care ever did. Their effect on the health care system will be more pernicious and long-lasting–they will exacerbate the fragmentation and the injustices in the current system, and they will stymie the effects of reformers who are trying to achieve clinically focused quality improvements, greater access, and efficient financing.

POLICY: Review of One Nation Uninsured

And while we’re making such a fuss about Jonathan Cohn this week, he has a book review out of One Nation Uninsured, by Jill Quadagno. Not having read (or even heard of) this book which is a history of why universal insurance reform has failed in the US, I can’t comment much on it, but the story as relayed by Cohn is more or less true. Every time reform gets close one special interest or another kills it, and nothing ever gets done because the voting public perceive the reform to be a income transfer from them to poorer people.

Some people are working on the first issue (Brian Klepper’s group, the Center for Practical Health Reform is one), trying to get the industry as a whole to realize that the Titanic is headed for an iceberg, and that some level of reform is needed that will stop the attempts by providers and suppliers to find the ever expanding frontier and make us all live happily together within our borders. But I don’t hold much faith in that.

I do, though, think that the next time around, the pressures on the voting public are sufficient that enough of them might identify with the UN- and under-insured that a universal plan might sneak through.  But that does mean that things have to get pretty bad over the next 2-8 years for that to have a chance.  But then again, as was reported by the team at UCLA, California is on its way to having less than half the population with employer-based insurance. If that trend keeps playing out, and everyone else is getting only a high-deductible plan, middle class discontent may just be bubbling up enough for real change to happen.

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