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Consumers to Pay More Under Reform

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By MERRILL GOOZNER

The latest analysis of health care reform – out this week from bean counters at Medicare – shows reform will raise health care spending slightly over the next 10 years, not reduce it as promised by President Obama. That won’t make selling it on the stump any easier. Yet there’s a glimmer of hope in the out years of the 10-year projection that the plan will begin to “bend the cost curve.”

Here’s the real bad news for reform supporters. The private insurance market will absorb most of the increase, and most of that will fall on individuals. Employer contributions for their workers’ private insurance will actually fall $120 billion in 2019 from previous projections because of reform.

Individuals will get hit two ways. First, the actuaries at CMS are projecting a huge 9 percent increase in out-of-pocket expenses in 2018 and 2019, after the so-called “Cadillac tax” goes into effect. This is a steep excise tax on high-cost insurance plans. To avoid tax penalties, experts expect employers with such plans – which may only be high-cost because they are filled with sicker and older beneficiaries – will reduce coverage by increasing co-pays and deductibles.

A second factor driving out-of-pocket expenses higher for individuals under reform will be the insurance mandate, which will drive many people to seek coverage through the new state exchanges. CMS predicts over 30 million people will be getting insurance through the exchanges in 2019, substantially more than the 24 million projected by the Congressional Budget Office last March, when reform passed.

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Hyperventilating about the Harvard/Health Affairs Malpractice Study

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By DAVID DRANOVE

A new study from an interdisciplinary team at Harvard University reports that the medical malpractice system costs close to $60 billion annually. The study is published in the policy journal Health Affairs and is receiving lots of attention in the media. The attention is unwarranted. The study is old news, of questionable validity, and prone to misinterpretation. But that hasn’t stopped the medical lobbying complex from hyperventilating about the findings and renewing its call for massive tort reform.

The study provides no surprises to anyone in the health research or health policy arena who pays attention to malpractice. All of the data are in the public domain and most have been reported in previous studies. (For the past decade I have reported essentially the same findings in my health economics class.)

The most important component of malpractice costs is defensive medicine. The Harvard authors put this at $46 billion, or nearly 80 percent of the total, but this is pure guesswork. Researchers cannot agree on the extent of defensive medicine. The Harvard authors base their estimates on seminal studies by Kessler and McClellan. Their work is seminal largely because it was first, not because it was definitive, and later studies often find far less evidence of defensive practice. The Harvard authors try to be conservative by using the low end of the Kessler/McClellan cost estimates. But truth would have been better served if they had stated that the cost of defensive medicine could just as easily be $16 billion or $76 billion.Continue reading…

Primary Care is Not a Panacea: It Takes a Team

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By MAGGIE MAHAR

The emphasis on primary care as the “key” to lifting the quality of U.S. healthcare may be exaggerated according to a report, released today, by Dartmouth’s Institute for Health Policy & Clinical Practice.

“Primary care forms the bedrock of a well-functioning, effective health care system,” the researchers observe. But– and this is an important caveat- “simply increasing access to primary care, either by boosting the number of primary care physicians in an area or by ensuring that most patients have better insurance coverage, may not be enough to improve the quality of care or lead to better outcomes.”

Wait a minute. In past reports, didn’t Dartmouth’s researchers tell us that patients fare better if they see fewer specialists and more internists?

No. Dartmouth’s earlier studies have shown that when patients see more specialists, care is more aggressive and more expensive, but, on average, outcomes are no better—and sometimes they are worse. This, however, doesn’t mean that primary care, by itself, ensures better care, even if a patient sees her PCP on a regular basis.

As the report points out: “Primary care is most effective when it is embedded in a high-functioning system, where care is coordinated, where physicians communicate with one another about their patients, and where feedback is available about performance that allows physicians and local hospitals to continually improve.”

Policy should “focus on improving the actual services primary care clinicians provide and making sure their efforts are coordinated with those of other providers, including specialists, nurses and hospitals,” says Dr. David C. Goodman, lead author and co-principal investigator for the Dartmouth Atlas Project.

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Health 2.0–The Fall Conference is going to be great!

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By Matthew Holt

Health 2.0 Cofounders Matthew Holt and Indu Subaiya
Health 2.0 is pleased to announce our (almost) final line-up for the Fourth annual Health 2.0 Conference in San Francisco, October 7-8. Since we started the series in 2007, Health 2.0 has become the leading showcase of cutting-edge technologies in health care, including Online Communities, Search and lightweight Tools for consumers to manage their health and connect to providers online. This year’s conference is the climax of Health Innovation Week, a week highlighting innovation in health care information technology. We’ve been reviewing the cream of the crop of demos and new arrivals and just a few agenda highlights include:

  • Keynotes from the Godfather of Web 2.0, Tim O’Reilly and America’s leading health futurist, Jeff Goldsmith.
  • The introduction of Sharecare. Jeff Arnold, original founder of WebMD, has partnered with Dr. Oz, Discovery, Harpo, Sony and a host of content contributors to create the most anticipated online health offering in years.
  • The wraps coming off Castlight Health. CEO Gio Collella has raised $80 million in venture capital and has ambitious aims to change the way we buy healthcare.
  • The presentation for the winners of the Health 2.0 Developer Challenge from Federal CTO Aneesh Chopra and the CTO of HHS Todd Park.

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What Good are Health Insurers?

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By BILL KRAMER

Bill KramerAs the health reform effort moves into the final stages, everyone seems to be taking a whack at health insurers. Some of the insurers’ wounds are self-inflicted, such as WellPoint’s announcement of 39% premium increase for individual policies in California. Some of the attacks are calculated to build public support for health reform, since every good crusade needs a good enemy. Some of the criticism has even suggested that we don’t need private health insurers. Michael Hiltzik asked the question in a recent column “What do we need health insurers for anyway?” James Surowiecki – usually a careful and thoughtful observer of business and economic issues – said the following in a recent article in the New Yorker:

Congress [in its health reform bills] is effectively making private insurers unnecessary, yet continuing to insist that we can’t do without them. The truth is that we could do just fine without them: an insurance system with community rating and universal access has no need of private insurers.

Surowiecki goes on to comment on what the world would look like without private health insurers:

In fact, the U.S. already has such a system: it’s known as Medicare. In most areas, it’s true, private companies do a better job of managing costs and providing services than the government does. But not when it comes to health care: over the past decade, Medicare’s spending has risen more slowly than that of private insurers. A single-payer system also has the advantage of spreading risk across the biggest patient pool possible. So if you want to make health insurance available to everyone, regardless of risk, the most sensible solution would be to expand Medicare to everyone.

Not so fast. I would feel more optimistic that this would work if we had a different political system. One of the limitations of this approach is that Medicare’s spending is ultimately determined through the political process. The U.S. political system – for better or worse — allows the health care industry (or any other well-funded interest group) to use its financial resources and lobbying power to increase the flow of government funds into the health sector. The idea that Medicare has a “hammer” to force providers to accept lower payment rates is largely an illusion. In the current system, Medicare can do this only because there is a safety valve, i.e., a large private insurance segment that pays much higher rates to providers. If Medicare gets larger or replaces private insurance altogether, there will be less opportunity to use the safety valve, so providers will step up their efforts to use political pressure to increase payment rates in Medicare. I simply don’t see a strong countervailing political force that would exert sufficient political pressure to hold down costs.Continue reading…

The History and Future of Medical Technology

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MedTech125Ad If you are curious about how the amazing technologies found in modern hospitals and clinics came about, check out Ira Brodsky’s entertaining new book, The History and Future of Medical Technology. The hardback tells the story of the people behind each technology—their dreams, their struggles, and their lucky breaks.

Told in you-are-there fashion, it gives you a front row view of the discoveries and inventions that led to today’s imaging systems, implants, prosthetics and more. The book also covers pioneering work in areas including personal health technology, robotic surgery, nanomedicine, and brain-computer interface chips.

The book contains fourteen chapters: Better Living through Biomedical Engineering / The Hidden World / Medicine’s First Power Users / Fantastic Voyage / Human Electricity / The First Cyborgs / Wireless Chemistry / The Nuclear Option / Listening to the Body / Repair or Replace? Part I / Repair or Replace? Part II / The Vision Thing / Technology with Real Teeth / Bodies in Cyberspace.

The History and Future of Medical Technology is 321 pages and includes 26 illustrations. Published in May of this year, the book is available from Amazon and other resellers. For more information, including sample pages, visit the publisher’s website: http://www.telescopebooks.com.

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