Joseph Paduda's weblog on managed care for group health, workers compensation & auto insurance, covering health care cost containment, health policy, health research, and medical news for insurers, employers, and healthcare providers.
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MCM will be taking a vacation till January 2. To all - best of the season, rest up, we have a lot to do next year.
It's called "managing the delta."
The health plan business is pretty healthy these days, and the reason is simple - HMOs are keeping health care cost increases under 6% while increasing premiums by 7%+.
Sure, expense management is key, but so is revenue management. The question is, can HMOs manage cost increases for more than a few quarters? History indicates Not.
Thanks to Bob Laszewski for doing the heavy lifting by explaining how this happens.
A couple of sources informed me that the company CorVel bought in California is actually a Work Comp claims company - a third party administrator or TPA.
This is really confusing. Not only does CorVel sell their services to TPAs, but the TPA business in California is in the tank these days. While this may have helped CorVel get a good price, it also means opportunities are limited.
Not only does the stock price bewilder me, so does the strategy.
OK, this is just a little outside the usual focus here.
I've been fascinated by CorVel's stock price lately. For a company that does not appear to have much in the way of growth prospects, with a record of declining revenues over the last three years, in an industry whose lifeblood (lost time claims) is dropping, it is awfully pricey.
Yesterday the company announced it bought a California workers comp medical management firm, evidently as part of CorVel's California strategy.
Now that's really confusing. Managed care firms that focus on California are hurting - premiums are down, claims are down, and employers are a lot less concerned about their claims costs then they were a year ago. No pain means less interest in looking at or paying for claims management programs.
Despite the realities of the market, CorVel is enjoying a stock price that has jumped almost four times its low earlier this year.
Your guess is as good as mine.
And thanks to a friend for passing on the tip about CorVel's acquisition.
Bob Laszewski is one of the best-connected and most perceptive people on the national health care policy scene. He's also a good friend. Bob recently joined the health blogging world and is posting at Health Policy and Marketplace Review.
Bob's background is impressive - former head of two life and health insurers, founder of an international health policy advocacy group, consultant to Congressional committees and often cited on NPR, the McLaughlin Group, the NewsHour, and the Sunday morning news shows.
His most recent post is on health care cost trends, and the puzzling drop in health insurance premium increases. Well worth the read.
There is one significant blind spot in Sen. Ron Wyden's (D OR) Healthy Americans Act - because the benefit plan is based on the one enjoyed by Congresspeople and Federal employees, it fails to consider that many Americans can't afford the maximum out-of-pocket limit, while to others it is a mere pittance .
The problem with the FEHBP and Congressional plan is all those folks have jobs so they can afford deductibles. A lot of folks working at Walmart can’t. As presently constructed the plan looks a little, well, elitist.
The fix is simple.
Add a means-tested copay.
Poor folks can’t afford the $1000 deductible in HSAs now, so they sure won’t be able to afford the $4000 max out of pocket in HAA. But, others can afford much more. The key is to not make it all in a deductible, but to spread it out in copays. That way people get treatment they need at a marginal but not inconsequential cost. And, they keep thinking about cost long after total expenditures have topped $10,000. Thus, they remain “consumers”.
Wyden's proposal will be attacked by consumer-directed health plan advocates – Herzlinger, the Galen Group nuts, and the rest about how we need to get consumers engaged and all that. And the more rational among them will have a good point.
So, beat them with their own stick. The problem with CDHPs is that they have zero impact on the folks who spend the most – the chronically ill. By adding meaningful, means-tested copays, HAA would enable poor folks to get the coverage and care they need, while ensuring all are financially-sensitized to cost.
Hank Stern of InsureBlog has posted the latest from the world of risk management and related topics. There's interesting and wide-ranging stuff from car insurance to physician credentialing.
I've been virtually talking with other interested parties and staff from Sen. Ron Wyden's (D OR) office about his Healthy Americans Act and how it deals with pricing. Here's my preliminary take.
There are two core concepts central to HAA's viability. First, universal coverage. If everyone has coverage, than there is no (or at least a lot less) need for providers to charge folks with insurance more to cover their losses incurred when they treat people without insurance. Cost-shifting drives up health insurance costs for those folks fortunate and employed enough to have coverage.
Those without insurance also don't have the same access to nor do they receive preventive medicine as frequently as those with insurance.
These two problems make the un-insured a problem for the insureds; they end up paying a hidden tax approaching a thousand bucks per family in the form of higher premiums.
Second, community rating. This is a method of developing health insurance premium rates (or for any other type of insurance) wherein actuaries figure out what a population's total costs will be, then estimate what portion is allocated to each individual, family, single+spouse, etc. The only means of altering or modifying the premium amount per insured is by geographic area; insurers are prohibited from factoring in age, sex, previous medical conditions or any other factor.
Community rating has been condemned because it has not "worked" in the past; this is true, as far as it goes. The problem with community rating is that if all health plans in an area don't stick with it, it falls apart. Health plans that are seeking a competitive advantage in the market will try to charge lower prices. In order to do that, they have to ensure that their costs, specifically medical expenses, are lower than their competition. The best way to ensure that is to only sell health insurance to people who are not likely to need it.
So, the companies "underwriting" insurance skim off the healthy folks along with their premium dollars (which were going to subsidize the less healthy folks). Now, the plans that are still community rating find that their population is sicker, and therefore the plan has to charge higher premiums, which drives more healthy people into other plans...which produces the community rating death spiral.
Under Wyden's plan, there is no medical underwriting, which means the death spiral isn't started by risk selection.
But without universal coverage, community rating doesn't work.
You're better off getting treated at a not-for-profit hospital. Unless you qualify for treatment at a VA hospital, in which case you're the luckiest of all. At least that's the conclusion drawn by researchers at Harvard who evaluated care for three common conditions at over 4000 hospitals.
The for-profit sector was quick to respond, noting that their access to capital and investment strategies are allowing them to close the gap quickly. But there is a gap.
The study will undoubtedly spur further debate as to which type of delivery system delivers the best care, a debate well worth continuing. What we need to add is a consideration of cost. Without evaluating the cost of care delivered the debate is not as useful nor as important. If the not-for-profits do a better job of treating COPD, but cost five times as much per patient, the extra "quality" may not be worth the additional cost.
Also missing from the report is the impact of the delivery systems' practices on the functionality of the patient. While it is academically interesting to know which system met more of the clinical objectives, consumers may want to know how many patients resumed their full functionality after treatment.
For patients, it is not about the two-dimensional world of clinical criteria. It is about the health care system's ability to help them live fully.
The full study is available here.
Here's a synopsis of the initial reactions from the health blogosphere to Sen. Ron Wyden's (D OR) Healthy Americans Act.
Ezra Klein notes that insurance companies will have to compete on quality and low cost instead of medical underwriting and risk selection. I'd agree but note that HAA should push health plans to take all those dollars they have been investing in risk selection and broker commissions and invest them in care management. Health plans talk a lot about managing care, but few are really doing anything innovative or productive.
Matt Singer of Left in the West opines that Wyden's plan is not perfect, but as it dramatically reduces the number of uninsured, it eliminates many of the current problems in health care - cost shifting and cerry-picking (underwriting) among them.
Matt Holt thinks Wyden's a few years too early with his proposal, and also is not sure how the plan will actually reduce health care expenses. My take? Wyden's approach is to let the health plans figure out how to manage care and cost, thereby avoiding the "Harry and Louise" problem - the public really does not want government controlling health care.
If you really can't get enough of this, head over to the DailyKos, where deaniac, a single payer true believer, thinks that Wyden's plan solves the biggest problem (universal coverage) first. Not d's ideal solution, but way way better than the alternative (which is no reform at all). D also notes that the support from the SEIU is huge, as the union has more members working in health care than any other group.
Meanwhile, at least one blog describes this as socialized medicine, a repeat of Hillarycare, and, (yes, this is a quote "when everyone believes in something it's communism"). And says after two years of the Wyden program America will collapse. No reasons for the implosion; perhaps the poster is a really smart geologist who knows something we don't about earthquake predictions or has figured out that the center of the earth really is hollow and we're slipping into it. Hey, if they're not willing to be serious and thoughtful, why should I?
A much more thoughtful criticism is found at Hank Stern's Insureblog. Hank has three problems with the Senator's proposal and discussion thereof: it's reliance on community rating wherein all members get charged the same premium, and (Hank thinks) that the emphasis on prevention will not help down costs. Hank also interpreted Wyden's comments on cost-shifting to mean the program will solve the problem of cost shifting from private sector to the government; I didn't hear that (from private to government cost shift), which is why it's good there were a bunch of ears in attendance.
Hank's a good man and a sharp guy, but I'm absolutely fine with community rating. That's what insurance is; spreading the risk among a large population. And prevention with teeth will help reduce health care costs.
There's a few questions yet to be answered; among my concerns is the plan's full coverage once the member's out of pocket costs hit $4000. As I've noted before, most health care dollars are spent by folks with chronic conditions. And once they blow thru their deductible they don't care what it costs. If "consumerism" is ever going to be anything but a nice idea, we need to make sure the folks who spend the most have some financial skin in the game.
I posed that question, and when I hear back from Wyden's staff I'll update.
Sen. Ron Wyden (D OR) has come up with a plan for health care that just might work. Wyden’s plan requires all Americans to purchase health insurance, prohibits medical underwriting, replaces Medicaid with private insurance, and funds the program by a combination of employer contributions, individual payments, and recaptured funds from the mishmash of programs that attempt to address cost-shifting and indigent care.
Those folks making less than the poverty level will not pay anything for their coverage, with graduated subsidies for those making from 1x the poverty level to 4x. There's a lot more detail to the plan, which you can peruse at your leisure at Wyden's site.
Before you blow this off as another politician’s pipe dream, consider this. Wyden has clearly done his homework. The plan maintains a large role for private insureds while wooing providers by increasing reimbursement for primary care. It does not include federal rate-setting or price-setting or budget caps. It delivers the same benefit plan enjoyed by our elected officials (which is way better than the one I have thru United's Golden Rule...) And, it enables all Americans to choose among plans (sponsored by private insurers) that compete not on how best they can risk-select, but on how well they can deliver care.
The Senator was also brave enough to get on a teleconference with your reporter and a dozen other health bloggers.
Jeez, I know, sounds crazy. But Wyden's plan has been reviewed carefully by John Shields et al at Lewin & Associates. The Lewin report indicates employers will actually save money over several years, thereby enabling them to use the funds to buy machinery, train employees, perhaps even give raises.
Oh, and the plan delivers $1.5 trillion savings over ten years, according to the Lewin report.
Admittedly, this is a first pass, and I haven't read the entire 166 page bill. But so far, it's looking pretty good.
A well-done and tip of the cup, er, cap to Rita Schwab of MSSP Nexus. Rita has done and exemplary job hosting the latest edition of Health Wonk Review, wherein the best of the biweekly blogosphere are brung to you.
The pharma industry is still in a bit of a tizzy about the lawsuits alleging improprieties in pricing, with some saying there will be wholesale changes (pun intended) while others ho-hum the notion. But, as more information comes out regarding the McKesson - First DataBank suits, there appears to be more to the notion that changes are in the wind.
This is not just an item of passing interest; the plaintiffs in the suit alleged that these pricing practices have cost payers upwards of $6 billion over a three-year period.
There are two separate suits. McKesson's suit, located in California, is still in process and McKesson has vowed to fight to the bitter end. The First Data suit ended in October when First Data agreed to a settlement, wherein they will stop providing wholesale pricing data in 2008.
Some see FDB's capitulation as leading to the death of the AWP pricing methodology. I don't, even though the demise of this metric would be most welcome. But other trends in the sector make it likely AWP is going to slowly diminish in importance.
The case for the persistence of AWP is that it is broadly used today, and even with the disappearance of FDB, there are other sources for AWP pricing - RedBook and Medispan specifically. And these firms have not been charged with the kind of pricing manipulation that led to the FDB settlement. FDB's version of AWP results in prices that are about 5% higher than those provided by the other sources. Therefore, payers who change to RedBook or Medispan will see a rather quick reduction in costs. The key will be to make sure prices don't creep up as the entities comprising the pharma supply chain figure out how to recapture lost revenues.
Conversely, AWP is fast disappearing in generic pricing, where it is being replaced by MAC, FUL, and other methodologies that seem to provide a more objective and less fungible baseline.
The reason AWP is so reviled is few payers believe, and with good reason, it has any real objective basis. Therefore, payers perceive they are being over-charged, and if the plaintiffs in the two suits are correct, the over-charge is material.
Third party billers WorkingRx and Third Party Solutions may be for sale. The two pharmacy factoring companies together own the work comp script factoring business, a sector that has been under some pressure lately. According to several industry sources, the owners of both entities (Fiserv for TPS and investment firm Arcapita for WorkingRx) have engaged investment bankers to shop their respective companies.
WorkingRx has been struggling of late; consolidation amongst the pharmacy chains has cost the company some of its business. That coupled with its combative approach to dealing with workers comp payers, and recent legal defeats may have lessened it's long term prospects.
TPS is part of Fiserv's work comp pharmacy entity, that also includes DirectCompRx and transaction processor P2P. The word is Fiserv is shopping both TPS and DirectCompRx. TPS revenues are rumored to be near a half-billion dollars, but margins are thin.
What does this mean for you?
Potentially consolidation in the TPB industry, or if they are acquired by PBMs, a possible new approach to first fill.
The body of knowledge concerning consumer directed health plans is increasing steadily, and unfortunately for advocates, it does not appear to include much in the way of good news.
First, the good news.
Employers love 'em. Premiums are lower. People with these plans are more likely to think about cost before seeking care. Those individuals with chronic conditions seem to be taking care of themselves about as well as folks enrolled in traditional plans.
Now the news that isn't so good.
38% of those enrolled in these plans had delayed or avoided getting any type of health care because of cost.
Enrollment is essentially stagnant, with about one percent of working-age employees enrolled in these plans this September, about the same as last September.
CDHP enrollees are no more likely to have been uninsured before enrolling than those folks in traditional plans. (This addresses the hope expressed by some CDHP advocates that the plans will decrease the ranks of the uninsured)
The (well-respected) Employee Benefit Research Institute reports that almost half of the folks who have CDHP-type plans have less than $500 in their savings accounts. Of those who have not contributed, 44% said they didn't because they could not afford to.
So, we have about a quarter million employees, many with families, who are enrolled in these plans, have contributed little to their deductibles, and can't afford to. Put another way, they are essentially uninsured for most of the deductible amount.
Although those enrolled in CDHPs were more likely to seek information about costs than people in traditional plans, their plans were much less likely to provide that kind of information than traditional plans.
The net - consumer-driven health care is a great idea. And nothing more. Yes, proponents say this is a new concept that will take time to mature. In part they are right. But in part they are not - high deductible plans are nothing more than the major medical plans popular in the seventies and eighties. And we know how well those turned out.
Thanks to FierceHealthcare for the tip, and for those who want all the gory details, here they are.
In what will come as no surprise to anyone, Congress will eliminate the pending cut in Medicare physician reimbursement. Not only that, but docs who agree to report certain data to CMS will actually get a 1.5% increase in reimbursement from the Feds.
If you listen very closely, you can almost hear the medical community's resounding "yippee".
The reasons docs are not exactly ecstatic about the news are two-fold.
First, the rescission effectively continues already low reimbursement rates for another year. With physician incomes steadily dropping , and many private payers' reimbursement linked to CMS payment rates, their lack of excitement is understandable.
There is a bit of good news for some docs; reimbursement for Evaluation and Management codes is slated for an increase (really, no fooling...) of up to 30%.
The bad news is other codes (surgeries and the like) may see reductions of up to 20%.
Among the likely downstream effects is a drop in payments to surgeons treating work comp patients. For example, Texas' work comp fee schedule pays providers 120% of Medicare. The decrease in reimbursement will mean there will be even fewer docs interested in seeing WC patients. Few Texas orthopods have any interest in treating comp patients at the "old" fee schedule; it will be really hard to find any orthopod in Texas in 2007 who will treat a WC claimant.
Second, and even more troubling, is the last-minute, haphazard, blunt-instrument, let's-hurry-home-for-the-holidays, unthoughtful decision process. Instead of actually doing something about the underlying problems with Medicare, and the US health care system, Congress is just slapping a little more duct tape on the "problem".
Coventry is going to get into the work comp case management business. Public and private sources indicate that an acquisition is in the offing, and while it may not be CorVel, it will likely include an asset with case management capabilities.
Coventry CFO Shawn Guertin recently spoke at a Merrill Lynch function, and devoted a few minutes to the company's plans for workers comp. Here's a paraphrasing of Mr. Guertin's comments -
What happened in health care is now happening in WC (referring to the evolution of managed care). Coventry understands WC medical inflation is driven by lack of medical management. At this point WC managed care is an "early stage" industry of networks and med mgt. Guertin said he feels "really really good about" Coventry's WC business, and is convinced it is a good business. It has not grown as fast as he thought, but fundamentals are there. Guertin believes they have the best WC network in the business, and are a real leader in the space.
The industry (WC managed care) is one where they will grow organically and via acquisition.
Later, Guertin commented on mergers and acquisitions, and was pretty bullish. He stated he was "very confident" they will get something done, and noted that WC managed care was on their "A list" of targets. Specifically, Coventry is looking at fee based businesses that build on their fee based business, Fairly confident they will get a deal done.
OK, so if the company is going to grow thru acquisition, who's the target?
CorVel is logical, except the recent run-up in their stock price makes it very expensive.
Case management firm Genex has been on the block for some months now, but they have too many field case management nurses, which is a business Coventry is NOT interested in.
That leaves Concentra and IntraCorp.
Concentra is not likely - too pricey, owns clinics, already has a network, has a big field case management staff, is owned by a private equity firm who probably would want too much money, has a lot of debt outstanding.
Intracorp? The division of CIGNA has an aging and highly challenged bill review platform (Acumed) that sorely needs replacing. CIGNA has been restructuring IntraCorp, moving the group health services into the overall CIGNA structure while leaving the work comp services (case management, bill review and related services) separate.
On the negative side, Intracorp does have a sizeable field case management staff.
If a Coventry acquisition in the work comp spaceis in the works, I'm at a loss to understand the logic. Sure, the Coventry management is smart, capable, and has demonstrated their ability to run a business.
But work comp is very very different from group health, and a lot of group entities have jumped into comp only to regret the move.
This looks to be the week for health care quality, outcomes, and reporting posts. The latest comes to us courtesy of Fierce Healthcare and the Boston Globe in a report on cardiac surgeons' patients' death rates.
Within two weeks, anyone will be able to find out the mortality rates for 55 Massachusetts cardiac surgeons' bypass patients. And yes, the data will be case-mix adjusted.
The effort is similar to one that has been in place for some time now for hospitals' bypass patients. Mass. also reports general hospital cost data (and has been for years); procedure-specific data on costs and even hospital-specific, DRG-level data on hospital payments.
This is not just for data geeks; payers and employers should be using these data as part of their hospital evaluation process and when considering which networks to join. As an example, a payer can use the tables to determine that payments for non-complicated back fusion range from $15,452 to $20,488. Armed with this information, claims staff can negotiate with hospitals, execs can assess their performance, provider relations staff can build networks, and actuaries can calculate rates.
What does this mean for you?
There's lots of very useful data out there, you just need to look for it.
If the recent contretemps in the mass media and blog-o-sphere about provider quality measures, patient responsibility and cost issues are any indication, a lot of folks are thinking hard and talking loud about these issues.
Here's a synopsis of some of the more trenchant observations.
Medrants has two entries by a treating physician (smart, world-wise, and a bit world-weary), both of which I agree with whole-heartedly. The net - individuals are free to do what they want; just don't expect me to pay for it.
Note - this harkens back to a debate here on motorcycle helment usage.
Medpundit quotes John Banzhaf, the long-time veteran of the tobacco wars, who is calling for legal action against docs who don't encourage smokers to quit. That's a bit extreme for my tastes...
A recent post on patient responsibility and the WV program generated some angry retorts as well. The point these folk seem to be making is that it is very hard to define, much less measure, quality. Another point appears to be that you can't put a price tag on health.
This last comment is naive, and ignores the fact that dollars spent on health care are not spent on education, space travel, or Nintendo machines. The fact is the "cost" of health care is spent on physician incomes and lifestyles, profits for drug manufacturers and their investors, real estate developers who build skilled nursing facilities, consultants, device manufacturers, and all the "downstream" players - the car dealer that sells the orthopod the car, the travel agency that books her trip, the college that her kids attend.
We as a society choose to spend money that way. And the statistics certainly indicate that don't get much for our money, especially compared to other countries with better outcomes for less expenditure.
Re outcomes and measurements - don't confuse "it's hard" with "it can't be done". Anyone with any experience in health care knows case mix adjustment is an art not a science. As they also know that physician practice patterns are more subjective than objective.
That does not mean assessing quality can't be done. We aren't there yet, but we're getting closer. Here's one example. A client has analyzed their patients with back pain to assess the efficacy of Epidural steriod injections. They found that patients receiving three or more followed by surgery had outcomes that were worse (defined as longer return to work duration, fewer actually returned to work, higher costs) than those that had two ESIs and then surgery.
Is this the end all and be all? Of course not. But it did enable the managed care firm to identify those physicians using the latter treatment plan, and they are now receiving more patients.
Their work, and the work of CIGNA and Aetna, along with states publishing outcomes data for hospitals and Medicare for docs and Dartmouth for geographic areas will all contribute. The winners will be the health companies who figure out how best to use that information, and present it in a usable way.
As to Spike's question - the sooner the present ill-fated consumer-directed nonsense blows up, the sooner we'll get to a more rational health care system.
Next year, CIGNA will be (financially) encouraging members to go to more cost efficient providers. The mid-tier health plan has announced that it will be charging members less if they go to lower cost physicians.
CIGNA's not alone. Aetna's been a leader in disclosing cost data. Other health plans, partially motivated by a mandate from the Federal Employee Health Benefit Program to publish cost data, more and more health plans are dipping their corporate toes in the water.
Unsurprisingly, provider groups are loudly protesting the incorporation of cost data in network evaluation, saying it should not be the "primary factor".
Why not?
As long as there are some objective measures of quality, presented in a way that a reasonably intelligent person can understand, with the ability to talk with a member "ombudsman" about their questions, and a recognition in the benefit design that emergent situations don't incur financial penalties, what's the issue?
What does this mean for you?
More information will help patients vote with their wallets.
But we have a long way to go.
CorVel continues to intrigue. After my last post/prognostication about the potential for CorVel to be on Coventry's acquisitions-we're-thinking-about list, trading volume jumped by 40%. I'm not claiming a causal relationship, just a statistical one.
Since then, the average volume has been six times what it was earlier in the year. The stock price itself has seen a similar trajectory, with CorVel now trading close to $60 a share, almost four times its 52 week low.
Earnings have not appreciated nearly as much, resulting in a P/E ratio within a whisper of 40. (Exxon's PE is 11...)
This normally happens when a major new product, new customer, or new strategic relationship is near, or if investors all of a sudden decide the industry is the newest, hottest thing going. I doubt it's the latter; workers' comp managed care has been one of the more boring businesses for years. Yes, there is potential here, but one would have to be highly optimistic to think CorVel is the mechanism to unlock the hidden wealth in work comp.
Perhaps it isn't puzzling that in this environment CEO Gordon Clemons has been selling his stock (he's dropped almost 70,000 shares into the market in the last three weeks).
Maybe it's the company's impending stock split.
The problem with consumer-directed health plans as presently constructed is fundamental.
They will not work.
They miss the target entirely, mis-understand the problem, and, if taken seriously, will distract from getting to a real solution.
On the other hand, when they fail miserably, as they inevitably will, we'll be in such bad shape that a radical revision of the health care system may well be possible.
Thanks to Graham for the reminder...
My first reaction to a picture of a Medicaid recipient with one leg lost to diabetes smoking was outrage. After reflecting, I'm still outraged.
Behavior drives a significant chunk of health care costs. People with multiple modifiable risk factors are more than twice as costly to insure than folks without those factors.
So what do we do about it?
West Virginia is adopting a new policy for Medicaid beneficiaries, enriching benefits for those who commit to healthy behaviors, and providing the bare minimum for those who won't. The plan will protect children of beneficiaries who won't commit to the contract, but provide clear incentives for all to participate. And that's long overdue.
Critics complain that this providing different benefits for individuals based on their behaviors is somehow unfair, or unethical, or not likely to reduce costs over the short term.
I don't see it that way.
Medicaid recipients have a responsibility to taxpayers to ensure their funds are spent wisely. As long as we are considering "fairness", I believe it is unfair to ask taxpayers to pony up tens of thousands of dollars to pay for an overweight smoker's cardiac care.
Especially when those dollars could have gone to provide more pre-natal care, preventive care, immunizations, cancer screenings, and lower cost drugs.
Critics miss the essence of the problem - we have a limited pool of dollars to spend, and a limited amount of patience for those who want to spend dollars inappropriately. Personal responsibility for health behaviors should be a pre-requisite for Medicaid coverage.
And no, this does not mean I'm suddenly a big fan of consumer-directed health plans.
It's starting.
Rep. Stark (D CA) is already talking about cutting subsidies for Medicare Advantage programs, which he claims are costing taxpayers over 12% more than standard Medicaid programs.
This comes as no surprise to loyal readers and those who are old enough to remember when "Pete" Stark was a major player in national health care policy.
The study cited by Stark in his comments came from the Commonwealth Fund, which noted that on a cost-per-beneficiary basis, MA plans cost over $900 more than fee-for-service programs.
Democrats are all-but-certain to make MA plans a target early in the new year. Given the Dem's desire to enrich the Part D program by minimizing the doughnut hole, they're going to have to find the money somewhere.
And there is a lot of money flowing to Medicare Advantage programs.
Joseph Paduda is the principal of Health Strategy Associates.
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