For readers interested in workers comp, news from Effect Measure to whet the appetites of litigators looking to subrogate workers comp claims.

It seems that the highest levels of the Federal government were intimately involved in publishing information about the safety, or lack thereof, of the air around the WTC in the days after 9/11. And by all accounts they got it wrong.

Liberty Mutual, among other workers comp insurers, was, and is, on the risk for many of the people affected by the clouds of noxious substances resulting from the Towers' collapse. Perhaps they are already subpoena-ing away...

Posted by at 6:06 AM | Permalink

I was going to post a blistering riposte to an amazingly lousy article in the NYTimes (registration required), but Matt Holt beat me to it.

The Times article says words to the effect that the reason health care costs so much is because it makes us live longer. Boy is that misinformed, superficial, ineptly researched, and just plain wrong.

Health care costs so much in the US because prices are high and practice pattern variation prevails and there are too many uninsured and cost-shifting is rampant and Congress and the White House would rather grand stand about Terry Schiavo than address real problems.

Good work Matt.

Posted by at 9:39 PM | Permalink

Payer-provider interactions are getting downright pugnacious. Perhaps a more accurate characterization is the big health plans and health care systems are raising pugnacity to new levels.

Denver is the scene of one highly public row featuring United Healthcare and HCA’s HealthOne, one of the largest health care systems in the Denver metro area. The ongoing contractual dispute has led to lots of nastiness:

- termination of the UHC-HealthOne contract,
- filing of a temporary restraining order on the part of UHC to force HealthOne to enable UHC members to access some HealthOne facilities, and
- efforts by HealthOne to tightly control UHC case managers’ access to their facilities after reports that case managers were tring to get UHC patients to transfer out of HealthOne facilities.

This is not an isolated issue. Recent disputes have arisen in Rhode Island, Tennessee, and western Florida. Notably, several of the more contentious battles are between UHC and HCA.

Hospital and facility costs are the largest single contributor to health care cost inflation, and hospitals’ negotiating power, and willingness to use same, has grown significantly in recent years. It's likely that the recent announcement that HCA will be bought out by private investors will lead to an increase in the number and intensity of contractual battles.

What does this mean for you?

As United and others seek to constrain medical inflation, and hospitals work to maintain their margins in the face of increasing numbers of uninsured patients expect to see more of these battles hit the news around the country.

Posted by at 6:33 AM | Permalink | Comments (14)

Medicare Set-Aside (MSA) vendor Health Advocates (HAI) has been sold to drug supplier Amerisource Bergen (ABC) for about four times projected 2006 revenues, or $83 million. Yes, that seems awfully pricey, but HAI is also quite profitable, with margins above 50%.

Based on an EBITDA multiple in the 5x - 6x range, the price doesn't seem quite so outrageous.

It is likely that ABC purchased HAI for financial as well as strategic reasons. MSAs predict future workers comp expenditures for individual claims; a big part of those costs are for drugs. By teaming up a MSA company with a drug supplier, ABC may be able to combine the two offerings to create long-term, and highy profitable revenue streams.

ABC's struggling workers comp PBM subsidiary PMSI-Tmesys (which has recently gone through a major management shakeup) will now be positioned to benefit from HAI's customer base.

In my view, MSA profitability will inevitably decline due to price pressure from new entrants, and as the market becomes saturated, margins will drop. Thus, the opportunity, and the price paid for that opportunity, only makes sense if ABC can leverage HAI to drive more dollars to its other subsidiaries.

Posted by at 8:11 AM | Permalink | Comments (3)

Actiq, the lollypop pain killer, is rapidly becoming the biggest problem drug in workers comp. FDA approved only for treating cancer pain, the potent narcotic is now on most payers' top 5 drug list (ranked by dollars spent).

There are likely several factors that have enabled a drug clearly not approved for musculo-skeletal conditions to achieve this high "honor".

Actiq's premise is a rapid delivery of an opiod (fentanyl) to the pain centers via absorption through the mouth. It appears to work quickly and is quite effective. According to Cephalon (the drug's manufacturer), Actiq's ability to address pain is not specific to cancer, and it can be effective in addressing pain with other origins.

That effectiveness is likely a primary reason for the drug's growing popularity. But so is the inability of many physicians to adequately deal with pain. From reviews of many workers comp case files, it is evident that many claimants receiving Actiq are being treated by primary care physicians, orthopods, and other specialties that do not traditionally have significant expertise in pain management. As a result, when confronted with a patient complaining of excessive pain, physicians appear to keep upping the ante, adding ever-more powerful drugs to the patient's treatment plan.

Conversations with pharmacists, including Jim Andrews of Cypress Care (an HSA consulting client and workers comp Pharmacy Benefit Manager) support this view. Jim's company has developed and implemented a sophisticated peer review approach to managing Actiq, resulting in termination of fully two-thirds of Actiq scripts. WIth a monthly cost in excess of $1200 (depending on dosage strength), that's a lot of money.

Actiq will be going off patent in the near future. While that's good news, it is not likely to reduce either the incidence of usage nor have a significant impact on price. Over the last year, Cephalon has raised Actiq's price several times, resulting in a total effective price increase of over 40%. While a generic version is likely to hit the shelves this year, early indications are prices for the generic will be 10% below the brand.

What does this mean for you?

Workers comp payers have almost no ability to address drug pricing. If they are going to have any chance to gain control over drugs costs, payers will have to adopt intelligent, pro-active, clinically-based utilization control programs.

Posted by at 7:20 AM | Permalink | Comments (14)

Kaiser Permanente, one of the oldest and largest HMOs, is going to offer PPOs, high deductible plans, and plans with Health Savings Accounts. This marks a significant change by the big HMO, one that at first seems odd.

But from a business perspective it makes a lot of sense, for two reasons

Adverse selection - Kaiser (KP) is afflicted with the bane of the health insurer, an older and aging population. Over 800,000 members are over 65, and over 55,000 are over 85.

The over-65 population represents fully 10% of all members, and that percentage is growing. To balance the higher risks, and higher costs, generated by the older folks, KP needs to get more young, healthy people to sign up. Their lower expected costs will help subsidize the older folks' higher costs (which run 30% greater than average member expenses), thereby keeping KP financially viable.

Mission - KP's mission is to provide access to care and take care of people. With prices on even their lowest-cost plans above $6000 for a family in California, Kaiser found more and more people simply could not afford coverage.

The high deductible plans are less expensive, are more attractive to younger individuals and families, and will also help introduce these customers to the HMO. And once people get into Kaiser, most are quite satisfied.

If they weren't, KP wouldn't be so worried about attracting younger members to offset their older loyal members' health costs.

Posted by at 5:17 PM | Permalink | Comments (3)

The PR and financial fallout from the recent reports of inappropriate retroactive denial of coverage is starting to take its toll on California's Blue Cross plan. From Fierce Healthcare comes the latest news; the State of CA has levied a $200,000 fine against BX for their actions in one specific case.

And that's just one case. Reports indicate there are as many as 19 more.

What does this mean for you?

If David is doing battle with Goliath and the venue is the court of public opinion, you'd best bet on the little guy.

Posted by at 5:47 AM | Permalink

OK, for the last and final time, Zurich and StPaul-Travelers are not merging, one is not acquiring the other, there are no due diligence conversations going on, books have not been exchanged, and whatever else I can say to convince the rumour hounds that this one has no basis in fact.

Could they merge at some point in the future? Perhaps. But there are no substantive discussions going on today, and there would be if the two companies were thinking about doing a deal.

How do I know? And do I know with 100% certainty? No to the latter, but 95% yes. As to sources, colleagues in both organizations have been denying this for months, and StPaul-Travelers went so far as to issue a denial. And a pretty firm one at that.

Sheesh. I wonder if Oliver Stone is behind all this nonsense...

Posted by at 7:55 PM | Permalink

The Blues have decided to get smart. Perhaps not smart, but at least smarter. Blue Cross of California's much-publicized PR disaster arose when the LATimes published an article decrying the plan's policy of trying creative ways to cancel policies for individuals who had the nerve to ask BX to pay for their medical problems.

Actually, the problem arose when the State of CA took legal action against BX.

Hank Stern and Bob Vineyard at InsureBlog have commented on the Blue's policies and the fallout from the publicity surrounding same, with Hank taking me to task for my negative take.

I remain convinced that it was stupid and short-sighted, despite Hank's demurral.

Health insurance companies could have incredibly powerful brands. Nothing resonates more strongly with people than health. If anything, this becomes even more powerful as the population ages. Health plans somehow have never figured out that a brand image is an incredibly valuable asset, one that would enable them to grow market share, drive premium profits, and compete on some basis other than how thick their provider directory is and how cheap their premiums are.

But they don't.

Posted by at 7:44 AM | Permalink | Comments (2)

If you have yet to shower, you may well need one after reading this.

Just in time for election season, another chapter in Ohio Bureau of Workers' Comp scandal is heading for court. The latest news comes from the Toledo Blade, which reported last week that the BWC's CFO is alleged to have accepted bribes from brokers for investment firms eager to invest the Bureau's funds.

The bribes range from the mundane to the wierd - a couple hundred bucks to "buy something nice for the kids," expensive dinners and the use of nice vacation homes. The total value of the bribes amounts to less than $10,000.

If the allegations are borne out, it will look like the $10,000 investment's returns were, well, quite good. According to court documents, the investment firms received over $3 million in commissions on BWC business. That's a 3200% rate of return, a result any investment firm would be proud to report.

As pathetic and sleazy and low-class as this is, the really disgusting part of this sordid chapter is the response of the investment firm to the allegations.

These scum are justifying their actions by touting the great results that the BWC enjoyed from their investments, as if the end justifies the means.

If you can't get enough of this mess, read on.

Posted by at 7:33 AM | Permalink | Comments (2)

In yet another example of self-inflicted trauma, an insurer has been accused of illegally canceling health insurance policies for individuals with serious medical conditions.

This time it is Blue Cross of California. According to the story in the LATimes, a family's coverage was canceled by Blue Cross after the insurer uncovered inconsistencies in their insurance application, inconsistencies which, according to Blue Cross, would have caused them to deny coverage for the family.

So let's say the insurer acted appropriately, which in this case appears dubious. But set that aside; health insurers, which aren't exactly beloved by the American consumer, look cheap, heartless, and stupid for this type of decision.

Posted by at 8:14 AM | Permalink | Comments (1)

We've made two changes to Managed Care Matters.

Least obvious to most will be the change in color of hypertext links; we are now using blue, which is more easily read by folks w certain types of color blindness. Thanks to friend Terry Reardon for the suggestion. (he's a color blind orthopedic surgeon, who assures me that is not an occupational limitation...)

We've also added another step in the commenting process, asking submitters to enter a bit of text to verify they are a human and not a @#$%^&*&^%$^&**))*%%$## spam bot. Sorry for the extra step, but I can't go thru 200 spams a day looking for your pearls.

Posted by at 9:08 AM | Permalink

One of the oft-cited rationales for Health Savings Accounts and Consumer Directed Health Plans (HSAs and CDHPs) is their potential to reduce the number of individuals without health insurance (or, as my neighbor says, the "individually self-insured). While HSAs may have some benefits in terms of increasing consumer awareness of costs, for two rather obvious reasons, HSAs will not help reduce the number of uninsured in the US.

Unsurprisingly, most of the people who are uninsured would have coverage if they could afford it. And while HSA plans may be less expensive than comprehensive plans, they are still beyond the reach of most in the lower-income brackets.

For those in those brackets who purchase HSA plans, there remains the issue of funding the deductible. For an individual or family at the median income of $46,326, a typical deductible will consume 5%-10% of their gross, pre-tax income, a burden that pushes their total cost of health coverage into the “completely unaffordable” range.

The second reason (not that you need another one after figuring out that HSA plans are just too costly for most of the people currently without health insurance) lies in their favorable tax treatment.
The main benefit of HSA (health Savings Accounts) plans is their tax-exempt status. Funds put into HSAs are not taxable and accrue interest tax-free, making them a great tax-avoidance scheme for those looking to reduce their tax burden. (that''s one of the reasons we have an HSA plan)

That’s wonderful, but only if you actually pay taxes. Turns out that over half of the uninsured (55% to be precise) pay no taxes. Another 16% are in the 10% bracket, and 23% more hit the 15% level.

Which leaves me wondering how exactly expensive, tax-favored plans are going to help address the problem of access to care.

Another thank-you to the Commonwealth Fund and Karen Davis for providing the data.

Posted by at 7:25 AM | Permalink | Comments (3)

I was unable to attend the rest of the National Consumer Driven Healthcare Summit; had to jet off to Phoenix to talk about drugs. But not to worry, the good people putting on the Summit posted the presentations so I was able to download and read them at 35,000 feet somewhere over Texas.

And boy was I rewarded.

The first presentation I leafed thru was by someone from the Galen Institute, a very conservative think tank type-organization apparently populated solely by folks coming from or headed to the Heritage Foundation, American Enterpriise Institute, or the University of Chicago's school of economics.

It reminded me of a paper done by someone in a hurry to "just get the damn thing done"; light on substance, lots of white space, unsupported claims and conclusions without basis.

The presentation cites studies from McKinsey and Assurant Health and Cigna and AHIP that provided glowing, albeit not terribly detailed or comprehensive or specific or peer-reviewed, statistics revealing the rapid growth, democratic nature, and promise of CDHPs.

One of the opening slides had a picture of Old Glory on it; what exactly the flag has to do with CDHPs I'm not sure, but it is election season so perhaps it indicates that consumer directed health plans come right after baseball hotdogs and apple pie. Or maybe I'm reading too much into it.

Well, after reviewing that presentation, I was ready for meatier fare. And Karen Davis' presentation was certainly all that. Ms. Davis, of the Commonwealth Fund, presented data from studies by several non-partisan groups, including the Kaiser Foundation, Employee Benefits Research Institute and her own organization.

Here's where real research and careful analysis helps us to put the growth of CDHPs in perspective. For example, of all the people who joined employer-based high-deductible health plans, less than half had a choice. And the ones who were enrolled were less satisfied with their coverage; only 8% of those enrolled in regular comprehensive coverage were not satisfied, compared with over 25% of those enrolled in CDHPs. Why were they less satisfied? Well, their out of pocket costs were much higher and they were less satisfied with their choice of doctors.

Not surprisingly, CDHP enrollees also were more likely to delay or avoid getting health care due to cost. While that is not necessarily a bad thing, an earlier study indicates this can contribute to higher costs over the long term due to poor compliance with chronic care treatment. Over a quarter of those with deductibles over $1000 didn't fill a prescription due to cost, 19% did not see a specialist, and 26% skipped a recommended test or treatment or follow-up visit.

Perhaps the biggest problem, and the one most "real", is that many of the people with high-deductible plans don't have enough in their HSA accounts to pay their health care costs up to where their insurance kicks in. That's why 20% of the people with deductibles over $1000 were unable to pay medical bills, and 17% had to change their way of life to pay medical bills.

There's way more substance here, which I'll get to soon. My takeaway so far? If the CDHP advocates want to make a strong case for their version of health care, they better do a much better job than they did in Washington this week.

And congrats to Ms. Davis, who Aced the course with a well-researched, carefully put-together, and highly substantive presentation.

Posted by at 7:57 PM | Permalink | Comments (3)

I went to the National Consumer Directed Healthcare Summit in DC yesterday skeptical but with an open mind. And after Paul Ginsburg's opening talk, I was thinking there may well be a pony in here somewhere. Unfortunately, I left after three more presentations still searching for the pony.

I was at the Summit on a press pass, a result of a leap of faith by the Summit's founders who were (wisely) concerned that my apparent bias against consumer directed health plans would make my review of the Summit a hatchet job. I thank them for their faith.

My general sense is there were two groups of people in attendance; the speakers on the first day (with some exceptions were) a Washington-focused group of thinktankers, Bush Administration folks and friends thereof. The other group included insurance companies, employers, labor, and entrepreneurs more interested in the business opportunity than the self-congratulatory bonhomie that was woven into the presentations.

Except for Paul Ginsburg's. Dr. Ginsburg (an aquaintance) gave a brief talk on the role of benefit design on consumer behavior. His presentation noted that at present the fairly rigid definition of CDHPs (that is, what a CDHP is for tax purposes) is quite limiting, and will likely severely reduce CDHP's usefulness. I may be pushing Paul's point a little, but not much.

His main points were several.

1. there are no income-based deductibles, therefore the mandated deductible amount will be (relatively) high and therefore unaffordable for low-income folks and low for the wealthy and therefore have limited impact on their spending habits.

2. a lot of the spending in health care is for the chronically ill, a group that will blow thru their deductibles and then will have no incentive to be smart consumers.

3. the plans have weak incentives to use "good" providers and weak incentives to manage one's own health.

CDHPs are at an early stage in their relatively brief life. But that life may be quite short if these serious shortcomings are not addressed, and fast. The presentations by the speakers following Paul were long on gloss, superficial statements, and outright errors of fact and short on recognizing the limitations of CDHP and suggestions for ways to address those limits.

Unfortunately they did a much better job of obscuring the pony than narrowing down the search.

More on that in the next post.

Posted by at 8:44 AM | Permalink

The shine appears to be wearing off the CDHP movement. And fast. Comments from several knowledgeable folks indicate that the movement may have been oversold on its merits. I'm expecting to learn a lot more later this week as I'll be attending the Consumer Driven Healthcare Summit in Washington as a member of the press.

An exec at one of the largest consumer-directed health plan companies does not believe consumerism is the cure for rising health care costs. Aetna's Charles Cutler said "I don’t think high-deductible health plans are the cure-all for bringing down health care costs."

The director of Johns Hopkins' Center for Hospital Finance and Management agreed, noting "What you recognize is that most of the spending occurs after the deductible is reached. Once that happens, you don’t care how much things cost. Any hospitalization puts you above the deductible."

And employers are not exactly beating down the doors begging for CDHPs. The Midwest Business Group on Health's membership director's perspective was illuminating; " Our membership is not embracing that as much as the consultants would lead you to believe...Five years ago, CDHPs were being pushed and pushed and employers were scratching their heads. And the reality is that penetration is still pretty low."

That's one of the great things about a market-based economy; only the really good ideas, properly executed, have staying power.

What does this mean for you?

A reminder that there are no silver bullets, and that consumerism is just a part of, and not the entire, solution.

Posted by at 7:09 PM | Permalink | Comments (1)

The Cleveland Plain Dealer has published an article that is highly critical of Ohio's workers comp managed care program. The analysis performed by the paper (and subsequently reported by AP and other news outlets) notes that administrative costs associated with claims management have gone up much faster than the rate of inflation,while medical costs have experienced a similar trend.

Several other papers inside and outside Ohio are also focusing on the BWC managed care program.

That being the case, one could well argue that managed care in Ohio has been a very costly mistake. It has not reduced medical expenses, it has increased policyholders' costs, and some of the deals negotiated by BWC seem, at the very least, to have favored one vendor over others.

I had some personal experience with the Ohio WC program early on, and again several years ago. I was asked to give a speech at a BWC-sponsored physician meeting that essentially was supposed to be an endorsement of BWC's physician profiling/education program. Never mind that the program was not exactly leading edge, used superficial evaluation criteria, had not included physicians in the program's original design, or that the officials did not really want me to dig into the program.

No, what they wanted was to hire a shill.

Managed care has been variously ridiculed, heartily promoted, touted as a panacea and blamed for driving costs up and doctors out of health care. What often gets lost in the sheer volume of the "discourse" is what exactly managed care is, and what version is the subject of that specific argument.

It will do the industry and its various stakeholdes no good if managed care is discarded. We need careful analysis, rigorous study, and thoughtful investigation, and the Plain Dealer's work is all of the above.

Posted by at 8:17 AM | Permalink | Comments (1)

HMOs are cheaper than other forms of health insurance due to lower provider costs. At least that's what an analysis of a 2004 study comparing HMOs to other forms of insurance discussed by Jason Shafrin in a post on Healthcare Economist says.

The difference amounted to 9.3%, with no measurable difference in utilization rates or risk selection between HMOs and other plans.

So, as an industry, HMOs are not more efficient because they are better at managing care or selecting risk, they are cheaper because they pay providers less. I would note that the analysis is based on data from the nineties, so perhaps a more accurate statement is that in the past HMOs were more efficient.

I don't know if that's the case today.

Posted by at 5:22 AM | Permalink | Comments (1)

Part D's implications will be many, far-reaching, and complex. Why? the sheer size of the market...One-twelfth of all scripts dispensed in retail pharmacies were for Part D recipients.

Here's a snapshot of the crystal ball.

Big pharma has done well so far, very well. Helped by broad formularies, the addition of millions of people to their customer base, and myriad Part D plan sponsors, many with minimal negotiating power, pharma manufacturers have seen profits jump, driven in large part by price increases (as well as more people with drug "insurance").

Lots of people have enrolled, albeit after a careful analysis of cost-benefit, an analysis that will inevitably lead to financial problems.

There are as many as 90 different Part D plan sponsors, ranging from UnitedHealthcare to Humana to Coventry (Advantra Rx). The two largest, UHC and Humana, have 45% of the stand-alone Part D market .Expect the Coventrys to disappear from many markets over the next two years, as their lack of market share, buying power, and traction in the market forces them to either sell out or get crushed by the big players.

Sources also indicate that there are still problems with the dual-eligibles, those folks that are covered by Medicare because they're old enough and Medicaid for financial or physical reasons. The issue appears to be these dualies are enrolled in Part D as well as other plan(s), making it hard to sort out who is liable for what.

Meanwhile, Part D sponsors are not exactly rolling in profits, and probably won't be. Humana and UHC are both reporting loss ratios in the high nineties, consistent with their competition.

Posted by at 7:06 PM | Permalink | Comments (2)

Hank Stern and Bob Vineyard of InsureBlog have prepared a virtual cornucopia of health wonk delights. Their edition of Health Wonk Review is indeed serious brain food. No reservations required, come as you are, and buon apetit'!

Posted by at 6:47 AM | Permalink | Comments (1)

Projections for insurer profits this year are looking pretty rosy, at least according to Fitch Ratings. For most property and casualty insurers, profits are up over last year at this time, losses are down, and premium growth continues to trend slightly upward as well.

As always, profits are only as solid as tomorrow's weather forecast, and few insurance execs think they're out of the woods yet.

The best results came from the larger diversified insurers who experienced combined ratios below the mid-nineties, a stellar result. But perhaps the best results were delivered by WC insurer Zenith National, which recorded a phenomenal 71.2% combined ratio. Zenith's strong first half of 2006 can likely be attributed in large part to the rapidly improving WC environment in California where Zenith is a strong player. The company also benefits from CEO Stanley Zax' obsession with underwriting discipline.

A complementary study was released by Bain and Company which indicated that the largest P&C companies returned the most value to shareholders, a result Bain interprets to imply that revenues are as, if not more, important than earnings.

Other interesting take-aways from the Bain study include their conclusion that expense management is not highly valued (even though it is all too popular, perhaps because it's easier than growing revenue or profits). And, insurers that make a series of smaller, more focused acquisitions seem to do much better than those that go for the big ones.

Closer to home, the Best report noted that those insurers that focused on organic growth by retaining their best and most loyal customers did very well. The property insurers busily jacking rates into the stratosphere would be well served, as would their owners, if they took this finding to heart.

What does this mean for you?

The equity markets reward insurance companies that grow intelligently and at a measured pace; the present meteorological conditions will do even more to enhance the value of those insurers that preserve customer relationships and grow intelligently.

Posted by at 5:54 AM | Permalink

The mess, and it is a real mess, that is the Ohio Bureau of Workers Compensation scandal has spread its ugly tentacles. The latest is the innuendo that the present head of the North Dakota state workers comp insurer has been unfairly linked to one of the accused felons involved in the Ohio BWC corruption. (ND is a monopolistic state, where WC insurance is only available from the state itself).

I have no personal knowledge of the ND fund situation, but find it most distressing that an individual who once had the misfortune to work with one of the sleazy officials in Ohio would be somehow tainted by that link.

Fortunately, an upcoming audit report will provide an objective review of the ND fund's operations (link is the past report, new report is due shortly) and results. Here's hoping that it finds nothing even close to the swamp of misdeeds and corruption that was Ohio's BWC.

Posted by at 7:31 AM | Permalink

Mark McClellan is leaving his post as head of the Center for Medicare and Medicaid Services. He served long and loyally, sticking to the Administration's line even when facts indicated otherwise, remaining a calming force when Part D enrollment was going nowhere. McClellan is also known for listening hard to suggestions and criticism from all sides, and working diligently to address problems.

Here's what's happened during his tenure.

Part D was passed, implemented, and operational. This was a monumental task, and one McClellan was instrumental in accomplishing. It's not his fault it is a fatally flawed program; well, maybe it is, in some small part, as he was probably involved in writing/editing/opining on the legislation. Nevertheless, under McClellan the program became reality, with the initial enrollment problems addressed (in large part).

McClellan is leaving before making a serious effort to add Health Spending Accounts (HSAs) to Medicare, a change he talked about early this year.

While some would say we'll have to wait for historians to judge McClellan's performance, we already have one group that can act as a surrogate for historians - actuaries. And their assessment is, well, instructive.
Physician utilization has continued to drive Medicare costs up and up and up. Prices for services have been held low, so docs are simply doing more procedures.

And Part D will be unbelievably expensive. 8 trillion dollars of Medicare's total long term deficit is due to Part D.

The changes, and lack of changes to Medicare over the last few years may well result in the financial collapse of the system within five years.

My take? McClellan may have done more to usher in national health care than anyone else.

And that would be quite an accomplishment.

(thanks to Kimble Ross for pointing out my error in the original post; I said it was Scott, not Mark McClellan. Mark was Bush's press secretary for several years, and is Mark's brother)

Posted by at 6:35 AM | Permalink

Hank Stern and associates at Insure Blog are awaiting your submission for this week's edition of Health Wonk Review.

I know it's the first day back from vacation, I also know it's time to get busy building traffic! Send your entry to Hank at InsureBlog@hotmail.com.

Posted by at 7:28 AM | Permalink | Comments (2)

The bad news is the number of those without health insurance in the US has grown to over 46 million. The good news is that a few states have seen a reduction in the number of uninsured; the really bad news is a few have gotten even worse.

Several states are doing well. One is Iowa, where the uninsured population actually decreased last year, as the percentage of those without health insurance dropped from 10.4% in 2004 to 9.1% in 2005. Part of this success is due to increased enrollment of kids in the state's Hawk-I program, which more than doubled over five years to 34,600 in 2005. This parallels an increase of 200,000 enrolled in various government-funded programs over the same period.

Maine's one of the better off states, with a population of uninsured that is significantly lower (10.5%) than the national average of 15.7%. The state's Dirigo health plan, an effort to increase coverage among Mainers by targeting small employers and kids, has failed to meet enrollment goals but generated significant savings. It is tough to tell if the program has had an impact on the uninsured rate, as it is very new.

One that is not experiencing the same level of success is Arizona, with 20% of the population uninsured after an increase of 225,000 in the number of uninsured in 2005. To address the problem, the state is seeking to implement a revamped Medicaid program under a Federal waiver that focuses on the lower-income workers employed at businesses with fewer than 25 employees. There are over 200,000 businesses in the state that meet the size criterion.

As bad as the situation is in Arizona, it is worse in Texas, where almost a quarter of the population lacks health insurance.

What does this mean for you?

A closer examination of individual states may help us understand drivers of and solutions to the problem of uninsurance.

Posted by at 3:19 PM | Permalink | Comments (4)