Managed Care Matters

I've been considering why Republican politicians and pundits favor de-linking employment and health insurance. Portability is certainly a good reason; some workers can't leave their jobs for fear they will lose coverage, or won't be able to get new coverage due to a pre-existing condition. That interferes with the free flow of labor, and may well inhibit economic growth and prosperity.

The high cost of US health care is certainly worth mentioning, and especially the impact of that high cost on competitiveness. American manufacturers and service companies are at a big disadvantage simply because they have to pay a lot towards health care (via premiums and taxes, driven by the world's most expensive health care).

Linking employment to insurance also means when people lose their jobs, they lose their coverage (except for those who can afford to pay the whole premium for the maximum 18 months allowed under COBRA). This last got me wondering - is there a correlation between unemployment and the President's political party?

Turns out there is, and it isn't what many suspect. In fact, unemployment under Republican presidents is significantly higher than when a Democrat is in the White House.

A study by Elliot Parker of the University of Nevada, Reno, found that unemployment at the end of presidential terms was significantly higher for Republicans (6.0%) than for Democrats (5.2%). And, the Unemployment Rate actually went up under Republicans (+0.3%), while it decreased under Democrats (-0.4%) Parker used the period from 1949 to present for his analysis, noting that the period prior to that date was heavily influenced by the Depression and two world wars. (but if you include the period from 1929 on, the numbers are actually worse for Republican administrations)

The reason for the differential seems pretty obvious - when economies perform better, jobs are added. As Christopher Hill at Boom2Bust writes;

"Real GDP Growth Rate (annual average) under Republican administrations now [for the preiod 1949 to 2005] stood at 2.9% and Democratic administrations at 4.2%. Real GDP Growth Rate Per Capita was 1.7% for the Republicans and 2.9% for the Democrats. These results prompted Dr. Parker to conclude that “the economy has grown significantly faster under Democratic administrations, and more than twice as fast in per-capita terms.”[emphasis added]

Parker also considered whether there was a lag effect - policies can take time to make their impact felt, time that may influence results. As Mr. Hill put it; "The professor found that even with up to four years of lagged effects, there was no evidence that the economy performed better under Republicans."

It's not just unemployment and economic growth. Parker's research found that by many measures, Democratic administrations delivered better economic results than their Republican counterparts - Dow Jones Index, weekly wage indices, corporate profits...

This is one of those great validations of the internet - start looking for something and you'll be surprised what you learn. Is it possible Republicans want to delink employment and insurance due to their poor record on the economy? I don't think so.

And as their record indicates, they certainly wouldn't publicize it.

Thanks to Joe Lyles for getting me thinking about this.

Posted by at 5:36 PM | Permalink | Comments (2)

Gov Sarah Palin has claimed she is a reformer, maverick, independent pit bill, not afraid to take on special interests when it is in the interest of her constituents to do so.

She's also not afraid to ignore the advice of experts when it runs counter to her ideological position.

Case in point - the Certificate of Need program in Alaska. CoN programs are in place to prevent the building of duplicative/redundant health care facilities. The theory (supported by most research) is that the more facilities there are, the more costs will increase, with no appreciable increase in health care quality. Therefore, limiting the number of MRI machines and ambulatory surgical centers reduces costs.

As I noted earlier this week, Palin has been trying to kill Alaska's CoN program, claiming it will introduce more competition into the health care market, competition that will drive down costs and increase quality.

But that doesn't happen. The more facilities there are, the more costs increase - and quality decreases.

When Palin convened an expert panel to review Alaska's CoN program, they (surprise) advocated keeping it in place. The Governor didn't like that answer. Palin ignored the advice of the experts and proposed legislation to kill the program.

Palin's approach to health care is, to be kind, simplistic. According to the Washington Post, "It didn't matter what you asked her about health care," said Tony Knowles, the Democratic governor who lost to Palin in 2006. "Getting rid of certificates of need was her only answer."

Why?

Here's more from the WaPo piece.

"Palin was part practical politician, accepting more than $34,000 from medical groups that were trying to spur competition, [emphasis added] according to an analysis by the nonpartisan Campaign Money Watch. She also worked closely with Paul Fuhs, an Anchorage lobbyist who was helping imaging firms battle hospitals over control of a lucrative trade. And while supporters and opponents credited her with reaching out to all sides, they also said she was a fierce idealist, taking a philosophical position and not giving ground."

What's the net?

Another politician making decisions based on ideology and special interests, not on facts, data, and logic - decisions that will increase costs and reduce health care quality.

Posted by at 9:48 AM | Permalink | Comments (8)

The folks over at Think Progress have compiled a brief summation of Alaska Gov Sarah Palin's record on health care. There's not much there, given her short tenure as governor.

What's the net?

Alaska is a state with healthy people, very expensive health care, comparatively poor care for children and little in the way of a safety net for those kids. To date the governor's answer has been to eliminate the CoN program and build a government bureaucracy to promote more transparency

Perhaps her most significant initiative is Palin's effort to overturn the state's Certificate of Need program - the details are here.

Palin has also called for passage of a bill authorizing a new state agency to promote transparency in health care. "The bill would establish an Alaska health care information office to give consumers factual information on quality, cost and other important matters to help them make better-informed decisions about health care in the state."

Interesting that a staunch conservative would seek to increase the size of government to address a problem that private insurers are already working on.

The governor did sign a bill that slightly increased the amount of income an Alaskan could earn (from 150% of the poverty level to 175%) and still qualify for the SCHIP program. Still, Alaska's criteria are among the lowest in the country; in comparison most states allow income well above 200% of the poverty level.

Of course, Palin's health care record has to be viewed in context - which in this case is Alaska-specific. The most recent data from the Commonwealth Fund indicates health care quality in the state is ranked near the bottom, while access is also poor (36th), in general Alaskans lead healthy lives.

From a cost perspective, Alaska consistently ranks as one of the most expensive states for health care in the nation. For kids, the state was ranked in the bottom quartile by the Commonwealth Foundation.

Posted by at 7:43 AM | Permalink | Comments (0)

Colleague Bob Laszewski has ferreted out a couple of health care-related items from Sarah Palin's brief tenure as Governor of Alaska. One is her push to eliminate Certificate of Need requirements for building health care facilities, the other calls for more transparency via government intervention; "Alaska Health Care Transparency Act to provide consumers with information on quality and cost which would be provided by a new government-run health care information office."

Today we'll focus on Palin's efforts to overturn the Alaska CON process.

The short take? She has no clue what she's talking about.

According to Palin, "The Certificate of Need is being used by lobbyists and health-care organizations to limit competition -- through appeal of other's certificate awards or by filing suit against the state for those awards...[eliminating the CON process] will not only reduce the cost of health care, it will also improve the access to health care, allow more competition and improve quality of care for patients."

Palin referenced a recent paper authored by the Federal Trade Commission as support for her position; I'd note that the document was written during the present administration, one that has not been noted for an even-handed approach to science, analysis, and research. In fact, the FTC report clearly states its intent to encourage movement to a 'consumer driven' health care system that relies on market forces to determine costs access and quality. (for a thorough critique of the FTC paper, click here.)

In addition to the FTC report cited by Palin, another study from twenty years ago (based on 1983 and 1984 data) concludes that there is :"no evidence that CON programs have led to the resource savings they were designed to promote, but rather indicates that reliance on CON review may raise hospital costs."

The study goes on to say that were states to significantly relax their regulatory thresholds, "total hospital costs would not increase, but rather would decline by 1.4 percent."

Turns out that the FTC (then and now) may have missed something - a 1998 Duke University study found "Mature CON programs are associated with a modest (5 percent) long-term reduction in acute care spending per capita, [emphasis added] but not with a significant reduction in total per capita spending." And this is supported by more recent research, which clearly indicates the supply of health care facilities drives demand, not the other way 'round.

Ohio eliminated their CON program in 1995. Over the next four years, there were 19 new hospitals built, a five-fold increase in the number of freestanding MRIs, and the number of ambulatory surgical centers grew by 600%. These weren't being built to reduce costs.

Wait, there's more. The big three automakers all compared costs in CON v non-CON states, and found that states with substantial CON programs had significantly lower health care costs. In fact, when considering locating plants and facilities, the big three consider CON "as a positive factor". Chrysler found that their per-employee health care costs were substantially lower in CON states than in non-CON jurisdictions, with costs as much as 164% lower in CON states. GM found its health care costs were nearly a third less in CON states in a similar analysis. Their report states "“Some argue that deregulating health facility expansion will trigger free-market forces of supply and demand, and lead to lower costs. On the contrary, General Motors has not found that to be true based on our vast experience in states that have varying degrees of CON regulation.”

And an analysis by Ford found that inpatient and outpatient hospital costs were 20% lower in CON states.

Specific procedure prices were also lower in CON states, refuting Palin's contention that freeing up the market to more competition will reduce costs. MRIs were at least 11% more expensive, and CABG operations were at least 20% more expensive. Ambulatory surgery center charges were also 25% lower.

Quality is also higher in CON states.

A study published in JAMA found that the quality of outcomes in coronary artery bypass surgery was directly linked to the CON process. Those who had CABG in non-CON states were significantly more likely to die (5.1% chance v 4.4% in CON states) due primarily to the higher volume per facility in CON states. Notably, in states that repealed CON laws, the percentage of patients undergoing CABG in low-volume hospitals tripled.

The CON legislation Palin supported has yet to be approved by Alaska's legislature, and continues to face strong opposition from within the state.

Here's the net. Palin's doctrinaire position on health care is in lock-step with the GOP - it relies on an unfounded and unsupported faith in the free market's ability to somehow reduce health care costs and increase quality, despite all evidence that there is no such linkage.

What does this mean for you?

As John Wennberg and others have demonstrated conclusively, the more supply there is, the higher costs are. Health care is not like other economic goods, no matter how much Palin et al may want it to be. If you are looking for solutions you'll not get any examining Palin's record on health care.

For a thorough summary of the current CoN picture across the country, click here.

Posted by at 6:43 AM | Permalink | Comments (7)

Slowly, inexorably, inevitably, the government is becoming the nation's health insurer.

The latest report from the US Census Bureau indicates the number of Americans without health insurance dropped from 2006 (15.8 percent) to 2007 (15.3 percent) - good news, especially for those who finally got coverage. The source of the expanded coverage - government programs, especially for kids. Almost half of the 1.3 million folks who found coverage in 2007 were children; 600,000 more kids were covered in 2007 than the previous year, largely due to expanded efforts to enroll them in the SCHIP programs.

And another 400,000+ were from a single state - Massachusetts, that adopted a controversial plan to expand coverage.

But that's just the tip of the iceberg. The real story is the expanded role of governmental programs, primarily Medicaid. The percentage of Americans covered by governmental programs increased from 27 percent in 2006 to 27.8 percent in 2007; while the Medicare population grew (we are getting older...), Medicaid alone added 1.3 million lives.

Employment-based health insurance continues to erode (59.7 percent of Americans covered through work in 2006, 59.3% in 2007), as employers seek to reduce costs they slash jobs, drop health insurance, reduce benefits, and increase employee contributions. Employment continues to decline, with expectations that it will hit 6.0% later this year.

The number of folks who lost coverage over the last seven years now stands at 5.9 million. And those with coverage have seen the 'quality' of that coverage decline - deductibles/coinsurance/copays have increased dramatically while limits on coverage have expanded. Couple that with the lack of coverage available for individuals with pre-existing conditions (only 5 states offer guarantee issue on all products - Maine, Massachusetts, New Jersey, New York and Vermont) and the full scope of the insurance crisis starts to become apparent.

Many employers can't afford to provide insurance and many families can't afford individual plans or can only get coverage for conditions they don't already have (try getting full coverage if you're on lipitor, paxil, or insulin...) or with deductibles that require them to pay upwards of $5000 out of pocket.

What does this mean for you?

The market is not solving the problem of the uninsured. That's why government, in its bumbling, stumbling, inefficient, messy way, is becoming the answer for more and more Americans.

Posted by at 7:53 AM | Permalink | Comments (6)

They're at it again.

The latest assault on logic and reasoned debate comes from a physician in California (no longer practicing) who claims:

"Low birth weight infants are not counted against the “live birth” statistics for many countries reporting low infant mortality rates.

According to the way statistics are calculated in Canada, Germany, and Austria, a premature baby weighing <500g is not considered a living child.

But in the U.S., such very low birth weight babies are considered live births. The mortality rate of such babies — considered “unsalvageable” outside of the U.S. and therefore never alive — is extraordinarily high; up to 869 per 1,000 in the first month of life alone. This skews U.S. infant mortality statistics."

This is a very sneaky way to push a political position.

The doctor, Linda Halderman, has apparently not done any independent research. Instead, she has merely rehashed a 2005 article authored by a 'scientists' employed by that noted bastion of scientific objectivity, the Discovery Institute (for those unfamiliar with these folks, their primary mission is to promote creationism/"intelligent design", perhaps that's why their science is so faulty)

For comparison purposes, infant mortality statistics should be calculated using the same definitions for all countries, with very few exceptions (specifically a couple former USSR satellites, the Czech Republic and Poland). It is possible that other countries 'report' their data differently, but for comparison purposes, a standard definition is used. Fortunately, infant mortality rates are reported using WHO standards, which do NOT include any reference to the length of the infant, duration of the pregnancy, but do define a 'live birth' as a baby born with any signs of life for any length of time. For a detailed explanation of WHO data definitions, click here, for a really long discussion of the issue, click here.

Perhaps the good doctor was so busy providing policy advice to the California (she claims she is no longer practicing medicine due to low Medicaid reimbursement) that she didn't have time to do her research thoroughly. Either that or she's attempting to intentionally mislead her readers.

Halderman takes a couple rhetorical shots at our friends to the North, shots which are easily refuted. She claims "When Canada briefly registered an increased number of low weight babies previously omitted from statistical reporting, the infant mortality rose from 6.1 per 1,000 to 6.4 per thousand in just one year. [Canada has been reporting births of babies <500 grams at least since 2001].”

Canadians report their birth rates two ways; babies between 500 and 2500 grams, and babies <2500 grams. And the percentage difference between the two is negligible - 0.1% (5.8% including babies <500, 5.9% for all births) for 2001, 2002, and 2003.

Regardless of the measure you use, Canadian infant mortality figures look way better than the US'. And for comparison purposes, the WHO uses the same definition for Canadian and American births.

Halderman also says "Pregnancies in very young first-time mothers carry a high risk of delivering low birth weight infants. In 2002, the average age of first-time mothers in Canada was 27.7 years. During the same year, the same statistic for U.S. mothers was 25.1 — an all-time high." The statement just sort of sits there, but I'm assuming she's using this to somehow say that if you correct for the age of the mother, then we aren't so bad.

Uh, not so fast. In fact, older Canadian women are at higher risk (9.3% higher, to be precise) of delivering low birth weight babies than their younger compatriots.

And Canadian women as a whole are at much lower risk than American women.

Before someone makes the ludicrous claim that Canadian women at high risk go to US hospitals, thereby increasing the US' infant mortality rate and lowering Canada's, know that Statistics Canada counts Canadian women giving birth in the US in their stats.

Halderman makes another incorrect statement - "In Switzerland and other parts of Europe, a baby born who is less than 30 centimeters long is not counted as a live birth. Therefore, unlike in the U.S., such high-risk infants cannot affect Swiss infant mortality rates."

Wrong again, doc - for comparison purposes a standard definition is used.

This nonsense has been picked up by others in the right wing media machine (attempting to refute the liberal bias of the main stream media, no doubt). As of today, there were 1700 hits on a search for halderman infant mortality; a brief scan indicated a substantial portion were from bloggers rejoicing at the Halderman's insights and using same to make them feel better about high US infant mortality rates.

What does this mean for you?

It is indeed distressing when a physician spews this nonsense. This is a textbook example of an 'expert' using an inaccurate conclusion based on faulty research to support a political position.

So much for the Hippocratic Oath, Dr. Halderman.

Posted by at 7:51 AM | Permalink | Comments (4)

Most poor folks who don't have health insurance would if they could afford it. We've settled that.

But that's the problem - health insurance is just not affordable - today. And costs are not going down, in fact the latest data indicates employers will see another 10%+ jump next year - which will certainly lead to fewer employers offering coverage, fewer employees opting for coverage, and more folks without health insurance.

We've seen in Massachusetts that reducing insurance premiums does increase coverage, but the premium levels are still too high for some.

Leaving aside the uncomfortable realities of the real world, what is the correlation between 'price', defined as a percentage of family (not household) income, and insurance coverage takeup?

Here's one data point from one of Bob Laszewski's posts on Massachusetts -

"The state has seen a gain of only 18,000 Massachusetts residents with incomes above 300% of the poverty level in the Commonwealth Choice plan. That's because it costs $7,000 - 12,000 a year for a family of four to buy the baseline health plan that includes a $2,000 single/$4,000 family deductible before most benefits are available. A family of four with an income of at least $61,000 (300% of the federal poverty level) would not qualify for a subsidy."

One study suggests that family income should not be the only metric used when assessing 'affordability', as total financial assets, home ownership status, and other indicators may strengthen the correlation with take-up rates.

A paper on the topic was authored by Kate Bunford and Mark Pauly in 2002. (full version here) They used two different methods to determine affordability, one based on income and the other on the coverage purchased by similar folks with similar incomes. Perhaps unsurprisingly, there's a wide discrepancy in the results obtained from the two methods.

Here's an excerpt from a summary of their report.

"the insurance-adjusted poverty rate for adults aged 25-64 in 2000 was 10.5 percent; on that basis, health insurance is unaffordable for 10.5 percent of adults aged 25-64. For the whole sample, using the poverty line as a benchmark, 71 percent of the currently uninsured population could afford health insurance coverage...

...Using the threshold that 80 percent of similar households purchase insurance, they find that around 25 percent of the uninsured could afford coverage based on peer comparisons."

Pauly and Bunford conclude that "Depending on the parameters chosen in our definition, we find that health insurance was affordable to between 24% and 55% of the uninsured in 1998."

I'd note that the the summary states the "affordability of health insurance, measured in various ways, is not a particularly accurate predictor of whether a person will obtain coverage. It is certainly not the only explanation of observed patterns of insurance coverage." I'd also note that Bunford and Pauly's methodology is the basis for that conclusion; they looked at insurance takeup rates and analyzed similar populations, while other analyses relied on survey research.

What does this mean?

More research needs to be done.

Posted by at 7:42 AM | Permalink | Comments (6)

There's more recent data to refine our understanding of who is uninsured - and more apropos to earlier posts here, why. Sorry, libertarians, it's not because they don't want health insurance.

When asked why they don't participate in their employer's program, 1% of survey respondents said it was because didn't think they needed insurance.

One percent.

The survey, conducted by the Washington Post, Kaiser Family Foundation and Harvard University provides a "detailed look at the real life experiences and views of low-wage workers", with 'low wage' defined as less than $27,000.

Given the cost of health care and insurance premiums, it is not surprising that for many respondents health care is becoming unaffordable. When asked how easy or difficult it is to afford health care and health insurance, 1/3 of the respondents said 'very difficult', and 29% 'somewhat difficult'. A significant majority would also settle for lower pay if the job had health insurance (56%, compared to 39% who would prefer better pay and no health insurance).

And fewer and fewer are getting insurance through their employer. 69% of the respondents' employers offer insurance, but only 60% sign up (most because they already have coverage through another source, e.g. via a spouse's plan, Medicaid or Medicare). Adding up all those with coverage, 72% have some form of coverage, and the remainder does not.

Some claim that a hefty portion of the uninsured don't have coverage because they just don't want it. Could be; like I don't have a place on a lake in New Hampshire because I 'just don't want it'. Actually, that's not true; I also have three college educations to pay for, a mortgage and individual health insurance, so I 'want' the lake house, but I can't afford it.

Here's a passage from the American Enterprise Institute's magazine on the issue:

"more than 17.6 million uninsured live in households earning more than $50,000 a year, and household income is above $75,000 for more than 9 million uninsured. However, those numbers overstate the actual income available to those uninsured individuals, because household units are defined more broadly than are insurance purchasing units. As the composition of “households” changes, their income isn’t the same as family income available for spending on health insurance. The rising cost of coverage remains the primary barrier to insurance coverage for the uninsured, and in some cases, its value just may not be “worth it” [emphasis added] for those in higher income families. But a more narrow and consistent measure of the higher income uninsured is closer to 2 million, involving people with regular incomes over $50,000 who lack insurance for spells of more than a year. [emphasis added]"

My sense is that's what's really going on here. Poor people can't afford coverage, and thus don't have insurance. People of greater, but still modest means, also can't afford health insurance, so they 'choose' to go without.

But most don't 'choose' to be uninsured; the cost:expense equation makes that choice for them.

The question is - at what cost level would people buy coverage?

I'm going to take a shot at that tomorrow.

Posted by at 2:29 PM | Permalink | Comments (3)

The recent CONCORD report on cancer survival rates has been used by some on the right to support their contention that the US health care system is superior; according to Catron, the "much-maligned U.S. health care system is the best in the world." Catron and his fellow travelers' use of the researchers' findings has been, to be kind, selective at best.

The study looked at populations around the world, including 16 US states and a half-dozen metropolitan areas that represented 42% of the US population. (Not all state data was available due to collection issues and standards). Four types of cancer, including breast (women), colon, rectum and prostate, which comprise a majority of all newly diagnosed cancers in adults were examined.

From this, Catron concluded:

"Nowhere is this [the superiority of the US health care system] more obvious than in the area of cancer treatment. John Goodman reports on another study published in Lancet Oncology showing that the U.S. has the best cancer survival rates:

[this is a quote from Goodman, not from the Lancet] "A new study of cancer survival on five continents lays to rest the theory that Americans fare poorly compared to other developed countries … in almost every category Americans survive cancer at higher rates than patients in other developed countries."

Here’s a chart showing U.S. survival rates for breast and prostate cancer compared to the survival rates of four countries whose health care systems are often touted as superior to ours"

Here are a few of the problems with Catron's argument.

• Catron used two types of cancer, not the four that were studied. And the two he used were (surprise!) the ones that favored the US. Rectal and colon cancer survival rates were statistically similar in the U.S., Japan, Canada, France, the Netherlands, Sweden, and Australia
• There's no doubt the US survival rate for one of his examples - prostate cancer - is very high. There's also no doubt that this cancer is way over-hyped in the US, with much more screening and testing, lots of which identifies cases that are unlikely to be fatal. Prostate cancer is quite common among older men. It usually grows very slowly, so slowly that most of us end up dying from something else. So we're paying way more for screening that is marginally useful from a population perspective.
• The incidence of diagnosed prostate cancer in the US is much higher than in other countries
• Catron may have meant to say that the US health care system is much better for white folks. In the US, there's a wide disparity in survival rates between blacks and whites. For breast cancer, survival for white women in the USA (84.7%) was 14% higher than for black women (70.9%). For colorectal cancer, white patients in the US had survival rates 10% higher than for black patients (60% compared with 50%). For prostate cancer, However, there was a 7% difference in survival between black and white men (92% compared with 85.8%).
• The US stats covered less than half of the population; we don't know if survival rates in the other 58% of the population are better/worse/the same

The leaps of logic in Catron's argument would do credit to gymnasts with Olympian aspirations. First that the data is complete (it is not); second that survival rates for two types of cancer is a fair evaluative basis (what about other maladies?): and third that the US has a better health care system because of breast and prostate cancer survival rates.

The logical errors in Catron's analysis, combined with his faulty arguments, would be laughable if they weren't representative of how some actually 'think'. Their approach to any issue is to try to scare the bejesus out of folks, ignoring data and evidence contrary to their opinions. This does them no credit, and over the long term likely undermines their attempt to influence the dialogue on health system reform.

Looking at data from the Commonwealth Fund, and employing Catron's logic (better survival rates = better health care systems), we find that the 5 year survival rate for kidney transplant patients was 94% in Canada, 86% in the UK, and 83% in the US in 2001. Does this mean that the Canadian system is better than the US system? Of course not - and I'd bet that Catron and his ilk would be quick to point out the problems inherent in drawing such a conclusion.

What does this mean for you?

If you torture numbers long enough, they'll say anything you want them to. Catron's misuse of the CONCORD statistics is Exhibit One in the case against this horrifying practice.

Posted by at 7:11 AM | Permalink | Comments (1)

There are those on both sides of the political debate (and some who fancy themselves in the middle) who use anecdotes, scary stories, hyperbole and highly elastic versions of 'true' stories to support their solutions to our present health care insurance disaster.

While both sides are guilty, I'd have to say the free marketers look to be 'guiltier'. Case in point - I'm on the distribution list (at least at the time of this writing) for a few PR firms that have been hired by conservative types to get bloggers to espouse the libertarian, it-ain't-broke-that-bad-so-don't-fix-it perspective on health care reform. And they tend to try to scare the crap out of everyone with horror stories of waiting lists in Canada, patients expiring in the UK on transplant lists, and folks with furrin accents invading American hospitals as they try to get kidneys or MRIs or gall bladder surgery without waiting till three years after they're dead. And these are the reputable folks - there's also a lot of misinformation circulating in the webosphere about bad Canadian health care.

Not to say this doesn't happen - there's no perfect health care delivery/reimbursement system anywhere on earth (although the VA looked closer than most before it was underfunded).

Are there waiting lists in Canada? Yep - but they're not intolerably long. Are there waiting lists in the US? Yep. Which one is shorter? Depends. Do you have insurance? If you aren't insured and live in the US, the wait is really really long. If you are a workers comp patient in Massachusetts and need a neurosurgeon, the wait is really really long (the fee schedule is so low very few docs will take WC patients).

And let us not forget that American health care system has a pretty poor reputation for delivering consistently good care...

Ignoring the politically-biased reports on waiting lists, it is likely that Americans don't have to wait as long as Canadians for some specialty care, and some Canadians may actually not get certain services. For that rapid access, Americans pay almomst twice as much.

You can get it cheap, fast, or good - pick one. We Americans have picked fast, ignored good, and certainly ignored cheap. The Canadians picked cheap, are at least as good, and have accepted slow.

Before you vote, consider what you could do with $750 billion a year in the US - because that's how much we'd save if our costs mirrored our friends to the north.

Posted by at 7:27 PM | Permalink | Comments (3)

Two days after going down in defeat, overwhelmed by the physician lobby and AARP, health plans received another shot into the bow.

Rep Henry Waxman announced his intention to schedule Congressional hearings on insurance companies practices in the individual insurance market. What may have gotten Waxman's attention was the ongoing fiasco in California, where two major health plans joined three others settling claims that they illegally canceled members' policies.

The Congressional inquiry comes on the heels of multiple lawsuits filed in California against multiple health plans claiming various damages due to policy cancellation. Insurers have described some as 'political grandstanding' and 'totally without merit'. Nonetheless, they've also paid fines and agreed to corrective action.

Suits have also been filed and settlements awarded in Arizona,

Is John McCain paying attention? Remember McCain's reform 'plan' relies on the individual insurance market, a 'market' that has once again proven it is incapable of acting within the law. McCain seeks to end employer based insurance, replacing it with individual coverage purchased on the open market. The companies who would sell that insurance are the same ones now paying fines for illegally cancelling policies and denying claims.

Let us not forget that McCain's 'free market' is built on insurance companies seeking to make money - and the way they do that is by selling insurance to folks who don't need it. Those individuals who really need coverage for their current health conditions cannot get that coverage in the vast majority of states, as the insurance company is allowed to specifically exclude certain conditions and/or to charge significantly higher premiums. In fact, there are only five states that specifically require insurance companies to sell policies to everyone regardless of medical condition. (Maine, Massachusetts, New Jersey, New York and Vermont) If you don't live in the northeast, and if you have any pre-existing condition (and who doesn't?), you're out of luck.

Of course, health plans have a solution to this - they will cover a few more folks with pre-ex conditions, as long as the states agree to cover anyone with more serious problems. Now that's free market business at its best - guaranteeing private companies will take the good risks, and dumping the rest on the taxpayer. The plan, put together after "tireless efforts of the senior leadership of our industry" and seven months of hard work by AHIP's board would require state high-risk pools to take on anyone who may incur medical costs more than twice the state average, while requiring insurers to cover the rest.

If there's a clearer statement of the industry's lack of confidence in its ability to manage health care, I haven't seen it.

AHIP's plan crystalizes the problem - (most) health plans long ago gave up any pretense that they would or could actually manage care.

AHIP should change its name from America's Health Insurance Plans to the ARSC - America's Risk Selection Companies.

If McCain has a solution to this, he hasn't published it yet.

thanks to California HealthLine for the inspiration; for an excellent review of the individual market see Julie Appleby's piece in USAToday.

Posted by at 6:18 AM | Permalink | Comments (6)

Pundits (myself included) are detecting a sea change on the Hill - the health plans' power meter is just barely registering while physicians are pegging the needle. If you're wondering why physicians were so adamantly opposed to the Medicare reimbursement cut, it is because their compensation is barely keeping up with inflation.

Recall that the GOP was going to cut their Medicare reimbursement by 10.6% (while also reducing Medicaid and other Medicare-linked compensation). And this after physicians had gone several years with their income not even keeping pace with inflation.

According to the latest data from 2007, primary care docs enjoyed a 3.35% increase in compensation after inflation (6.3% before accounting for the 2.85% CPI uptick last year). This rather modest increase is way better than their specialist colleagues saw - inflation-wise, specialists broke even. However, specialists' median income was almost a third of a million bucks, while specialists were just over $182k, so the primary care docs have a long way to go to catch up.

And some of them have a really really long way - median general practice income was $119k, whlle Family practice docs made $129k.

Not bad money, but not exactly huge bucks either. The other part of the equation has to do with job satisfaction - if you love your job, you're likely to be less concerned with how much you make. But if you don't love your job, and some damn President/Congressperson is threatening to cut your already low income, while paying big health plans billions more than they should...

Job satisfaction amongst primary care docs is declining. 60% of PCPs (primary care practitioners) would not choose primary care if they got a do-over. 39% would pick surgery or diagnostics, and over one-fifth would not choose medicine.

Looking at changes from 2006 to 2007, the percentage of docs who counted themselves as 'very satisfied' declined from 24% to 18%, while those who were 'very dissatisfied' went up from 9.4% to 13.2%.

So what do these newly-empowered, angry docs want?

36% want a Canadian-style single payer system.

66% agreed that the "US should move to a market driven system that reduces the role of third party payers."

(note these were separate questions and therefore don't add up to 100%)

Yes, working with physicians has heretofore required cat-wrangling skills. And their egos require outdoor meetings as no hall is big enough. And all want more for their specialty and their patients are sicker than average. And they are all better than average.

And they've recently found out what they can accomplish when they stop acting like Augustus Gloop and work together.

Thanks to FierceHealthcare for the triggering tip.

Posted by at 6:16 PM | Permalink | Comments (2)

It's over, done, finished. For a few months, anyway. With the overwhelming Congressional vote to override Pres Bush's veto of the Medicare bill (keeping physician reimbursement levels and cutting subsidies for health plans' Medicare Advantage and Private Fee For Service), the pols can now move on to other issues.

But while they're working on oil drilling and war funding and education and trade, the 'solution' will merely serve to kick the problem further down the road. And when next we round the corner, we'll find that the ball has gotten much heavier (docs are scheduled for a 20%+ cut. We'll also find a rejuvenated physician lobby, one with a renewed strength and sophistication, marked by the 'partnership' with AARP.

The Senate vote was an even louder repudiation of Bush's position than the original vote, with four more GOP Senators joining all their Democratic colleagues and seventeen other Republicans.

Twenty-one Republicans voted to cut health plan subsidies and restore physician reimbursement. Twenty-one.

In the House, 153 Republicans (24 more than voted 'aye' originally') joined the 230 Democrats to overturn the veto.

Some (including Shadowfax) have said physicians don't have pull in Washington. If you don't believe in the power of the AMA now, I respectfully suggest you go back, do the math, and ask the GOP members of the House and Senate what made them change their votes.

The next time Congress tackles Medicare, you can be sure health plans' influence on Capitol Hill will have waned; no, diminished; no, disappeared; no, that's not quite right either. Suffice it to say that health plans lost this round, and lost it badly. And they have no one to blame but themselves. Appalled by stories of health plans canceling policies, wildly overpaying executives, and cutting back on coverage and physician compensation, Congresspeople found it pretty easy to take a few billion out of health plans and give it to docs.

As Bob Laszewski said when asked about health plans, "Now they have zero political capital, and they're just going to have it done to them next year.''

When it will hurt a lot more. By digging in their heels, health plans likely lost their last best chance to play a dominant role in future health care reform negotiations. Instead, they will likely find themselves with a seat or two at the table, but those seats will be at the far end, away from the powerful and influential.

Posted by at 7:06 PM | Permalink | Comments (3)

Several sources indicate Pres Bush is going to veto the Medicare bill (that rescinded physician reimbursement cuts and phased out Medicare Advantage subsidies). The veto may happen today.

Oops, he just did.

The Senate and House are likely to vote to override the veto pretty quickly - perhaps within a day or so. If the veto is overridden, it will be the first time a Bush veto went down to defeat.

A post on the Wall Street Journal's blog is notable not for the content (which appears accurate and timely nonethless) but rather for the tone and anger of the commenters. Remember folks, this is the WSJ, perhaps one of the most conservative publications in the country - yet the WSJ's readers are beyond angry with Bush and his pending veto. Think livid, furious, outraged, hyperventilating mad. This isn't exactly good news for McCain, who now will have yet another opportunity to either avoid voting on this (as he has to date) or will have to actually take a position.

If the veto is not overridden, it is going to be a holy mess out there in IT/reimbursement/physician contracting/patient access/state regulatory land.

Here are a few potential problems.

1. States that base their WC fee schedules on Medicaid will have to decide whether they are going to follow suit; and for those that are directly tied to Medicare, expect big noise from the occ med, ortho, and neuro physician communities.

2. CMS is going to start processing bills today with the 10.6% cut - and docs are going to start dropping out of Medicare at a rather rapid rate.

3. Republican legislators are going to be mincemeat during the August recess, which will be even uglier than their 'holiday' on July 4.

Posted by at 12:04 PM | Permalink | Comments (2)

Last week the National Coalition on Benefits went public with their position on health reform - they don't want any reduction in the role of employers. The NCB's position was laid out in a letter to Sens. Ron Wyden (D OR) and Bob Bennett (R UT) opposing the Healthy Americans Act. The big issue for NCB appears to be the HAA's focus on providing benefits through state organizations, thereby eliminating employers' ability to offer consistent plans across multiple states.

I don't get it. Or maybe I do, and it smells like good ol' special interest self preservation.

According to their website, the NCB represents employers, health plans, and trade associations that provide benefits under ERISA (Federal law that regulates big employer benefit plans, exempting them from state control). Members like the current employer-based system; their position is that "any change must not erode those parts of the health care system that are working..."

The NCB's letter goes on to claim "The federal ERISA framework also makes it possible for employers to drive value-based strategies that improve the entire health care system by allowing employers to apply leading edge, innovative practices on a consistent, nationwide basis."

That's a puzzler. If the current employer-based system is working so well, why

• have premiums gone up 87% since 2000 while the CPI is only up 17%?
• are 10 million of the uninsured working full time at large employers (>1000 workers)?
• did Safeway and Wal-Mart endorse Wyden's Healthy Americans Act?
• have insurance costs as a percentage of payroll gone from 8.2% to 11% in six years?
• are 30 million uninsured Americans in families where the head of the household is working full time?
  

According to a source in Sen Wyden's office, "what the National Coalition on Benefits is saying isn’t the attitude of all their members, even of some listed in that letter. In fact, the NCB had a conference call [last] week with some of the members listed on the letter who were unhappy because they didn’t agree with it."

Turns out the letter from NCB only reflects the opinions of the dozen members of the steering committee which is comprised of equal numbers of trade associations and employers (e.g. ATT, GM, UPS, Verizon).

The staffer went on to note that "news reports said Boeing was severely disadvantaged in competing with Airbus because of the costs they have to bear for their employees’ health care costs that Airbus doesn’t have to pay because their employees’ health care is paid for by the government. Employers could be relieved of that competitive burden under the HAA."

Wyden himself responded rather acerbically to the NCB (a change from his usual low-key, laid-back-Oregonian style), saying “We may be talking about the coalition of the un-willing. We have talked to several alleged coalition members -- like NIKE, AHIP, Wal-Mart and Johnson and Johnson -- and they all say that the letter does not represent their views on the Healthy Americans Act. As for their message, their defense of the employer-based health system sounds eerily similar to the Titanic’s deck crew hyping the merits of a sinking ship.

Whoever wrote this letter can’t guarantee a single American that their employer-provided benefits won’t be taken away. But of course, that’s not their job. Their job is to protect tax preferences for the status quo."

The Senator has a point. The tax benefits of the employer-based system are well-documented and extensive, amounting to about $200 billion annually for employers. Health benefits save employers and employees taxes as they are paid for with 'pre-tax' dollars - dollars that aren't counted as income for tax purposes. If employer sponsorship of health benefits went away, the assumption is the cash employers spend on benefits would instead be paid as wages (and therefore subject to taxation) or (under the HAA) paid into the state agencies as the employers' contribution for their workers' health benefits. Of note, monies paid to these agencies would still be tax-deductible.

Provisions in HAA allow for a transition from the current system over a two year period. Employers would increase their workers' wages by the amount they had been spending on health benefits. After that two year period was up, employers wouldn't have to pay employees the added wages, but instead contribute to the state agencies running the benefits purchasing groups. Here's what's puzzling about the NCB's position; the amount employers would have to contribute is about 10% of the total cost of health benefits for their employees - a much lower percentage than they are now paying.

Seems like a pretty good deal for employers.

According to the Lewin Group's assessment, "Private employer health spending under the HAA is reduced under the HAA by $309.8 billion, from $428.8 billion under current law to $119.0 billion under the program."

There's a much better reason for employers to maintain a role in the health benefits decision process than the ones claimed by the NCB - benefits directly impact worker productivity. If employers are removed from the process of vetting and selecting health insurance vendors, individuals would be responsible for choosing their carrier. Insurance companies would 'win' based on how cheaply they could provide insurance to individuals and families, and the less care delivered, the lower the premiums. I don't see what would prevent those vendors from suggesting each and every injured or ill worker or dependent tried bed rest and over the counter drugs for two weeks, then an x-ray or basic lab test, and only then would they get to see a diagnostician. In fact that's how group plans treat back pain, while under work comp care is much more aggressive as it is focused on getting that worker back on the job.

Over time, those insurers who best manage chronic conditions (which drive most health care spending) will have lower costs and therefore deliver lower premiums. But the key issue is this - health plan incentives under an individually-driven system are different from an employer-based system. Over the long term, payers would figure out how to best care for medical conditions, and over that long term, the ones who do it right will win. However, that may not be the case over the short term - wherein low price based on denial of care or very conservative care would 'win' in the individual market.

Of course, studies show the number of employers who actually understand the linkage between health benefits and productivity is identical to the number of Yankee fans living within two blocks of Fenway. Yes, employers are ignorant of the real reason they should be involved in health benefits. But that doesn't mean we shouldn't protect them from themselves.

The net is this. The Healthy Americans Act would save employers a shipload of cash. It would also allow them to focus on running their businesses and get them out of the health plan management business. Those are good things.

Yet the impact of health benefits on productivity is undeniable - and has to be part of the cost:benefit calculus.

Posted by at 9:26 AM | Permalink | Comments (1)

I'd been meaning to get to the Center for Studying Health System Change's annual Wall Street comes to Washington meeting for several years - finally made it and it has been well worth the trip from Conn.

There were two sessions, one devoted to health plans and the other to providers. I'll be reading thru my notes today and tomorrow to come up with a couple unified-theme posts. For today, we'll focus on what health plans are doing to prepare for health reform.

Panelists opined that there are two issues health plans have to address - dealing with the newly-insured and preparing for the possibility that the employer will not be the locus of control for health insurance purchasing. Christine Arnold noted that Cigna, Humana, and Coventry recently entered the individual market, with Aetna expanding its role while also acquiring Schaller Anderson, a veteran of the Medicaid world. UHC has been in the individual business for a while (post purchase of Golden Rule) and also has significant experience in the Medicaid and special needs populations (high cost, high risk Medicaid folks).

The individual market expansion is a hedge against McCain's plan becoming the law of the land. As I've noted, McCain wants to discard the employer-based health system and rely on the market to cover individuals (while doing nothing to prevent medical underwriting or exclusion of pre-existing conditions). As Arnold noted, the individual market won't cover many more folks unless there is a requirement for guaranteed issue and a significant penalty for those who refuse to enroll (otherwise they'll just wait till they get sick, then sign up).

For those who question whether an individual program will work, Bob Laszewski noted that the Feds already have experience with a large scale, community-rated guarantee issue voluntary benefit plan - Part D. In terms of enrollment, the plan has been extra-ordinarily successful (despite my prognostications to the contrary). In terms of financial rewards, the numbers are good for those sponsors that excluded many of the most popular drugs, and pretty dismal for the two biggest players - Humana and UHC. These companies cover all of the most popular drugs, so seniors interested in a drug plan found the plans that covered their drugs and then checked prices.

And promptly used their cards and that's why UHC and Humana are getting killed by Part D.

So what's the lesson here? Health plans need to understand the individual market, but they also need to remember that benefit design drives adverse selection, which drives higher loss costs. While selling individual policies may seem like good preparation for a possible McCain-type plan, examining the results of Part D may be more instructive.

Posted by at 1:33 PM | Permalink | Comments (0)

There are few issues that do more to crystalize the balance between personal freedom and personal responsibility than motorcycle helmet laws.

Twenty states require motorcyclists to wear helmets, which means thirty do not. Opponents of helmet laws see it is a personal choice and often claim wearing a helmet increases visibility and situational awareness. Could be.

Proponents of mandatory helmet laws note that fatality rates appear to be higher in states without helmet laws; common sense indicates that falling off a bike onto one's head without a helmet is likely to cause a more serious head injury than if one was wearing a helmet.

And there is an ongoing back and forth debate on the merits of statistical analyses and the results thereof, a debate that leads nowhere and gets folks all wrapped up in numbers, thereby obscuring the real issue - ultimately wearing a helmet is a personal decision, until you get a traumatic brain injury, whereupon it becomes a societal issue.

Here's an idea.

Those who want to ride without a helmet have to buy insurance that reflects that decision. That insurance must provide comprehensive coverage for medical care for associated with the covered individual, including long term custodial care, with a really high limit - say $10 million, that is indexed to the medical CPI to account for inflation. Upon showing proof of coverage, they get a special license plate. Insurance companies take the risk, society does not get harmed due to the adverse consequence of a personal decision, and those who want to ride with their hair blowing in the wind are free to do so.

Oh, and they should be required to be organ donors as well.

Posted by at 8:18 AM | Permalink | Comments (6)

GOP Senators better wear their cheap suits while marching in Independence Day parades this weekend, as it is tough to get tomato stains out of nice wool.

As Bob Laszewski pointed out, Republicans were boxed into a very tight corner by their Democratic colleagues after GOP Senators blocked a bill that would have prevented a drastic cut in physician fees. The maneuvering was ugly, as the Dems apparently backing out of an earlier deal that would have restored the cuts. Once the bill was overwhelmingly passed by the House, Senate Democrats were presented with a very big cudgel they could use to smack their Republican colleagues around. And with Congress heading out for the 4th of July recess, they have done so - publicly, loudly, and repeatedly.

Republican Senators now find themselves defending their vote to reduce physician fees by 10% (that's not exactly what happened, but close enough for politics) while refusing to reduce payments to big insurers. Payments that most view as far too generous.

Politically, the picture could not be better for Democrats. Republicans will be vilified for their vote to cut payments to Dr. Welby, everyone's kindly neighborhood physician while continuing to pay huge sums to big, faceless, bureaucratic insurers located far away staffed by nasty clerks who delight in forcing new moms to leave the hospital mere moments after giving birth.

And in an election year too.

There is a good bit of substance to the argument against continuing the massive subsidies for Medicare Advantage (MA) and Private Fee for Service plans (PFFS). These payments were supposed to be temporary, used to motivate health plans to set up alternative Medicare programs, to make it worth their while to get started. Now that many of these plans have been up and running for several years, they should be able to survive on their own.

And as far back as 2005, health plans in these programs were doing just fine. In an example of exquisite timing a GAO audit revealed health plans in the program made over a billion dollars more than they expected; $1.14 billion in extra profit.

Yet healthplans are fiercely lobbying to hold onto the subsidies, and their GOP allies are marching in lockstep - right off a cliff.

Health plans, and their Republican allies, now look like they won't pull their heads out of the public feedbag, even when it is obvious they are getting fat on taxpayer-funded subsidies.

Politically, both the GOP and health plans are being stupid. There's no other word for it. Not only is this politically suicidal, the longer term implications are obvious. Health reform is coming, and private health plans will want to play a major role. They will claim that the market is the solution (a point I have also been making).

Yet these free-market companies continue to argue they can't compete with the government-run Medicare program without massive subsidies.

Posted by at 7:24 AM | Permalink | Comments (4)

Opponents of universal care often cite awful stories of Canadians and Brits hurt, killed, or dead of neglect or bad care. And there's no doubt that people in Canada and Britain are the victims of poor medical care.

There is certainly some truth to the stories of bad Canadian and British medicine. It is also true that raising this issue doesn't help make the case against universal health insurance.

News flash - American patients often suffer pain, injury, or death from bad medicine. Here are a few examples. California hospitals recently disclosed hundreds of medical errors, "including wrong-organ surgeries, administration of incorrect drugs and neglect of serious medical conditions. This is a small percentage when weighed against the 4 million hospital admissions that occur in California each year, but still serious..." (quote from FierceHealthcare citation).

In Pennsylvania, wrong-site surgeries happen often - very often.

Nationally, between 48,000 and 98,000 Americans die each year due to medical errors. More people are killed by bad medicine than die in auto accidents or succumb to breast cancer.

A report on medical errors in the US blamed the system. Our system, one that does not offer universal coverage. According to the Institute of Medicine's 2000 report; "most of the medical errors are systems related and not attributable to individual negligence or misconduct. The key to reducing medical errors is to focus on improving the systems of delivering care and not to blame individuals. Health care professionals are simply human and, like everyone else, they make mistakes. But research has shown that system improvements can reduce the error rates and improve the quality of health care."

(I'd note that the IOM is a universally respected, highly regarded organization, unlike the agenda-driven think tanks typically cited by opponents of universal coverage).

Let's not forget the people without health insurance who die as a result of poor access to health care - late diagnosis of cancer, poor preventive care, and untreated hypertension, cardiovascular disease, asthma and diabetes.

And in the "did they even think about this before they wrote it" category comes this gem from biggovhealth.com; "Since 1997, the U.S. has made further improvements to the quality and accessibility of our health care, including the creation of Medicare Part D."

Uhh, folks, Part D is a government-run drug program that has resulted in many seniors getting access to pharmaceuticals, thereby potentially improving their health. Kind of like what universal coverage aims to do.

Contrasting the IOM's estimate that there are 18,000 excess deaths in America among uninsured adults to the anecdotal examples of poor care in Canada and Britain provides a much clearer picture of the 'dangers' of universal medicine. A picture of kids getting health screens, diabetics getting insulin, asthmatics receiving education and primary care, expectant mothers getting pre-natal care, and high-risk women getting mammograms.

Now that's a scary world.

Posted by at 6:38 AM | Permalink | Comments (6)

It is looking increasingly likely that the Democratic party will win big in November - with GOP strategists expecting a loss of 20 House and 6 Senate seats, along with the White House. Optimistic Dems are hoping for even more; it is possible they could win up to 11 Senate seats and another ten in the House. (for purposes of this post, we're assuming there is a Democrat in the White House in 2009)

Analyst Larry Sabato predicts 8-14 seats moving to the Democrats; given he accurately predicted the result of the 2006 midterm election his opinion bears consideration.

If we go with the Sabato midpoint, 2009 will begin with a 247-188 Democratic-Republican split in the House. But the House is not the key, the Senate and the White House are. In the Senate, look for the split to end up somewhere around 56 - 44.

House Speaker Nancy Pelosi (D CA) has been biding her time, building her power base and infrastructure while waiting for what she anticipates will be an increasingly Democratic House. If the numbers come in as expected, the Speaker will be able to deliver on her commitment to avoid the "dangerous narcotic of incrementalism."

But without a supermajority in the Senate, Pelosi, and Pres. Obama, will not be able to get much through Congress. That's the conventional wisdom; conventional, but when it comes to health care, wrong. Not only will there be a new political climate in Washington, there will be increasing pressure on both parties to deliver on their campaign promises. Moreover, there is bipartisan agreement on some of the thornier issues related to health, with broad support for incremental (increasing SCHIP funding) and major (overhaul of the health insurance system) changes. This agreement has been overshadowed by Bush's unwillingness to compromise on most issues, forcing members of his own party to craft legislation that will pass the President's requirements.

Add to the mix the likelihood that Sen Clinton will become majority leader of the Senate. Despite the demonization of Clinton by some on the right, she has a well-deserved reputation for working effectively with her Republican colleagues, a reputation that will serve her well in her new role.

While the Dems would love to begin with a huge overhaul of the entire health system, they've learned that doing really big things takes time, consensus, and foundation-building. Instead, the new year will likely start with fixes to current programs and 'corrective action' to address issues of little concern to the Bush Administration.

Expect the new political year to begin with incremental fixes to specific programs - SCHIP likely first out of the blocks. After the back and forth battles, marked by confusion and consternation from Republicans who felt Pres. Bush threw them under the bus by vetoing a bi-partisan bill to extend SCHIP earlier this year, enough Republicans are likely to cross the aisle to support funding of a somewhat-expanded program.

Also on the table will be reduced funding for Medicare Advantage, a program that has long struck Democrats as a giveaway to big healthplans. Foolishly. the insurance industry worked hard, and effectively, to block reductions in MA this year. As Bob Laszewski notes, with Congress and the White House changing hands, the bill they stopped this year will look great compared to what they'll get next. Expect MA subsidies to be slashed, in what could, and should, be seen as a shot across the bow of the insurance industry.

The FDA will also be under the microscope. Despite passage of the Food and Drug Administration Amendments Act of 2007, ostensibly fully funding the FDA and giving it the staff needed to do its job, the FDA continues to stumble. With a Democrat running the Administration, expect increasing oversight, much more post-approval monitoring, and much less tolerance for patent-extending gamesmanship.

The biggie will likely be Medicare physician compensation. With docs scheduled to see their reimbursement drop by around 15% in 2009, the caterwauling will be heard loud and clear inside the Beltway. Don't look for a major policy change, but rather something to satisfy the physician community and build a little equity for the future.

That future will likely begin in January of 2010, when the Congress and President will take on health care reform.

Posted by at 6:09 AM | Permalink | Comments (0)

If recent (and past) electoral history is any guide, this Presidential election, or at least the health reform part of it, is going to be fought with sound bites. We can already hear the right screeching about the ills of 'socialized medicine' while the left howls about the evils of privatized health care. The right trots out Canadians and Brits who allegedly suffered maltreatment (or no treatment) from the numb grey bureaucracy that is their 'national health system'. The left counters with stories of under-insured Americans bankrupted by health care costs.

Conservatives decry waiting lists, progressives bemoan the US' health care system's lowly international ranking.

This is a hugely complicated issue. Pat answers and bumper-sticker slogans are meaningless and should be treated as such. Yet few of us have the time to really dig into the issues, to fully understand the WHO's national health rating system or the reality of waiting lists in the OECD.

What's a concerned citizen, one really trying to understand, to make informed decisions, to do?

First, when approached at a cocktail party, kid's lacrosse game, or backyard barbecue by someone touting the latest statistic or quoting a health care horror story, just ask for the details. What is the source? Where did this happen? What caused it to happen? Who was involved? When did it occur?

I'm betting that in most cases the source will be vague (the internet...), location undefined, causality undetermined, and timing uncertain. So you're left with an impression, albeit one based on a vague, unsubstantiated source, an impression apparently designed to give you, the listener, a negative perception.

Second, ask what the solution is. How could this be fixed? What could have been done better/faster/cheaper/smarter and what conditions need to exist to make that happen? What do you think would solve this? How would we pay for it?

Third, ask for definitions. What exactly do they mean by 'socialized medicine'? Are providers government employees? Is this single payer? Are prices fixed? Is it universal coverage?

You don't have to be an expert/wonk/policy geek, but you do have to be curious and willing to push back on folks spewing mindless sound bites.

People who just want to complain, criticize, and demonize those with differing views are not going to help solve this problem, rather they are miniature 'Harry and Louise' bomblets, programmed to go off at random intervals, triggered by a headline or patently false email. They spread fear and uncertainty, worry and hesitation. Their victims retreat into the status quo as the devil they know sounds a lot better than the garbage spouted by these Harrys and Louises.

That's not to say we can't have strong disagreements (as loyal readers have undoubtedly noticed, we like spirited fights around here). As long as they are fact-based, supported by solid data and the argument is logical, have at it.

But leave the fear-mongering and logic-twisting to the John Stossels and Ann Coulters.

Posted by at 9:37 AM | Permalink | Comments (0)

Now that the Democratic primary season is over (and boy don't we miss it!), it is time to focus on the presumptive nominees’ rather different approaches to health care reform. (If Hillary 'unsuspends' her campaign and Obama drives off a cliff between the time I write and you read this, don’t despair, the Democratic candidates’ plans are more similar than they are different.)

The differences between the McCain and Obama plans are big – really big. Philosophically, McCain’s approach is market-based and tax policy driven, relying on individuals to make the best decisions on health care procedures and treatment. His plan would remove the favorable treatment of employer-funded health insurance, instead providing a refundable tax credit of $2500/individual or $5000 per family to help them buy insurance (note – the average individual policy now costs over $4000 and the average family policy cost exceeds $12,000). Conversely, Obama’s plan is more pragmatic, focused on fixing the problems with the current market-based system with a ban on medical underwriting, a comprehensive ‘minimum’ benefit design, financial help for small employers buying health insurance, and some sort of stop-loss insurance for high dollar claims.

As does McCain, Obama relies on private insurers to provide health insurance, but from there the two candidates’ plans diverge dramatically. One area where the plans appear to be similar is their stance on mandated universal coverage. While neither mandates coverage, Obama comes much closer, requiring universal coverage for children. But the Senator’s plan and public statements are a little disconnected; in Obama’s speeches and ads the Senator does appear to endorse mandated coverage - eventually.

Obama’s plan requires insurers take all comers, regardless of pre-existing medical conditions. Notably, although McCain’s original talking points did not mention guaranteed insurability, his campaign website now at least speaks to the issue – but his plan does nothing to change the status quo.

McCain wants to allow wide variation in benefit plan design and speaks glowingly of HSAs, while Obama is calling for a plan similar to the Federal Employee Health Benefit Plan. Both candidates’ policies appear to dramatically reduce states' ability to mandate certain types of care (e.g. acupuncture) with the result that regulation of health plan benefits will shift from a state to a Federal responsibility.

While most other candidates are talking about covering the uninsured, McCain is focused on cost. More specifically, the cost of chronic conditions such as diabetes, asthma and CAD which account for 75% of the US' entire $2 trillion health care bill. McCain is not just pointing out the obvious, he also plans to attack these costs by altering reimbursement - paying providers for maintaining health rather than reimbursing for specific procedures.

Here's how McCain put it: "We should pay a single bill for high-quality health care, not an endless series of bills for presurgical tests and visits, hospitalization and surgery, and follow-up tests, drugs and office visits,"

McCain is dead on when he talks about the need to pay for health, not reimburse for procedures. His focus on the need to aggressively improve care and outcomes for patients with chronic conditions is creditable.

But he’s dead wrong in his blind faith in the market to solve the problem of insurability, and just plain blind in his belief that the individual insurance market is the answer. Today, in the vast majority of states, there is a free market for insurers writing individual insurance. And no insurers that can medically underwrite don’t, with the result that those who most need insurance can’t get it. You can’t blame the insurers; why would they want to cover an individual with heart disease, cancer, MS, depression, or asthma, or all of the above? They wouldn’t, no matter what kind of ‘risk adjustment’ plan is in place. It would be irresponsible, especially for those insurers that are owned by stockholders (think Aetna, United HealthGroup, CIGNA, Humana, Coventry, Wellpoint…)

Notably, nowhere on McCain's website or in his policy papers does he say what the plan will cost. But his statements leave little doubt as to what he wants to do, and the Joint Committee on Taxation's report on the McCain health plan clearly demonstrates the financial impact of his plan. The cost of the tax credits would be $206 billion in FY 2009 and $3.6 trillion over 10 years. That is about double what Obama’s plan is projected to cost.

Equally notable, Douglas Holtz-Eakin, one of McCain's key advisers agreed that the McCain plan would increase the budget deficit, saying "It will make deficits expand up front, no question..."

The difference between the elephant and the donkey can perhaps be best summarized in two slogans.

For McCain, it might be “More expensive, less coverage.”

For Obama “Coverage just like I have, for only a hundred billion.”

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

Here, cribbed from Dr. Val and the Voice, are quotes they collected from yet another person, with my comments interspersed:

"Half of the people in the US have some sort of chronic illness. Health insurance is like having car insurance when 50% of people are having accidents. Of course nobody can afford it."

This is especially true because the wrecks are often caused by poor routine maintenance.

"We need to keep employer-based healthcare because when employers have 'skin in the game' they have the incentive to promote healthy behavior at a local level. Monolithic government programs aren't good at influencing people at the individual level. Employers know each of their employees by name, they are invested in their lives, they provide childcare services and other benefits to them, and each employee's health affects their bottom line. Employers are a critical force for promoting and facilitating healthy behaviors."

And employers have the financial motive to keep workers working and their families healthy so workers aren't worried about and/or taking time off to deal with family health issues.

"Alternative energy sources aren't that interesting when gas is $1/gallon. But when gas hits $4/gallon suddenly everyone is very interested in alternative energy. The same goes for healthcare. It takes a cost crisis to bring it to everyone's attention. And now the audience is listening."

A great analogy - our addiction to oil looks like it has limits, and our addiction to all the expensive health care we can waste may be hitting its own hard stop.

and thanks to Ann in Florida for the heads up.

Posted by at 8:09 AM | Permalink | Comments (3)

It has become fashionable of late to accuse the Democrats of backsliding on their 'commitment' to health care reform. Pundits have been opining that there isn't the political will, there isn't enough cash, the Dems can't get their act together, it's too much work, and other variations of "it's just soooooo hard".

I don't buy it.

I've been forecasting major reform for over a year, and nothing in the recent past makes me change that prediction. In fact, my take is recent developments make it more likely that we'll see major reform in the next Congress.

The Columbia Journalism Review disagrees, (I had problems w their site, apologies if the link doesn't work) quoting a few Democratic legislators' comments that appear to bode ill for reform. Their premise, that the Dems will have to push it, is obvious. The doubt is appropriate, but the careful selection of quotes appears designed more to support their thesis than to present an objective view. Here are a couple of those 'other' quotes'.

One of the pols the CJR took to task for wimpy words was Max Baucus (if you're going to pick a dissembler in Congress, there are a lot better targets than the Montana Senator). The Senator has said a lot about health care; has Baucus said "if reform isn't passed I'll move to Canada"? Of course not - but he did say "The moral and economic case for reform has never been stronger." Along with Baucus, Nebraska's Chuck Grassley is co-hosting a confab (of the major public variety); commenting on the meeting, Baucus stated "Our broken health care system is endangering families and sapping this country's ability to compete economically, and Americans want something done about it. But comprehensive health reform won't drop out of the clear blue sky - we have to do some legwork first..."

Baucus et al's opinions are supported by other eminent lawmakers such as Durenberger of Minnesota and Corker of Tennessee.

CJR followed up the original piece with a bit of clarification, concluding with the observation that principles (as stated by a few elected officials as the basis for developing legislation) did not mean anything will happen. Not exactly burying the lead, and not terribly informed or informative either.

It may well take 60 Senators to pass reform. Even if the Dems win big in November, they will still be well short of that magic number and need help from their colleagues across the aisle. A few Republicans will have to support any reform initiative, but that isn't as far-fetched as it may seem.

For example, Utah's Bob Bennett (R) is a co-sponsor of Ron Wyden (D OR) Healthy Americans Act - along with six other GOP Senators and an independent (Lamar Alexander (R-TN), Bob Corker (R-TN), Judd Gregg (R-NH), Chuck Grassley (R-IA), Norm Coleman (R-MN), Joe Lieberman (ID-CT), and Mike Crapo (R-ID). (btw, Corker is a relatively recent addition, which would logically indicate growing support)

The math works. Using current projections of electoral changes gives us between 54 - 57 Dems, and a handful of Republicans joining in puts the measure (which measure exactly is another question) over the top.

Sure, it is going to be hard, and tough, and there will be back- and side-steps amid the forward progress. But the odds remain in favor of health reform - and may actually be improving.

In the meantime, look for the reality behind the quotes. And nothing says reality more than a Senator's name on a big health reform bill.

Posted by at 7:11 AM | Permalink | Comments (0)

Productivity.

Lost in the great debate about the role of the employer, the individual, and the government in health care reform is the critical link between health insurance, care, and productivity.

Years ago when I was responsible for the Travelers' utilization review account management function I met with Bruce Bradley, who was then the head of employee benefits at telecom giant GTE. I was going thru the data, reporting on how well Travelers had done reducing this and cutting that, when he stopped me and asked about the ER and inpatient admissions rate for children with asthma. I didn't have the data, and asked why he wanted to know.

Bradley proceeded to educate me on GTE's workforce and their functions. To summarize, they had a lot of employees who were single parents or one parent in a dual-income family. Many of their employees worked in line maintenance, directory assistance, and other blue- and pink-collar jobs.

And when one of these workers was out of work, caring for a child experiencing an acute asthmatic attack, the lines didn't get fixed and calls didn't get answered. Bradley wanted to know what the Travelers was doing about this. Truth was, we weren't doing anything.

GTE is long gone, swallowed up in the telecom mergers in the nineties. But Bradley's point is as true now as it was then - keeping workers, and their families, healthy and productive is the primary objective of health insurance.

I'll grant that few policy wonks look at it from this perspective. Perhaps that's because they didn't have the pinned-to-the-wall-like-a-butterfly-in-a-display-case experience I went thru. But because they don't consider the impact of health insurance on employer productivity, they miss the reason employers offer health insurance in the first place - to attract, and keep, good workers.

If employers are removed from the process of vetting and selecting health insurance vendors, individuals would be responsible for choosing their carrier. Insurance companies would 'win' based on how cheaply they could provide insurance to individuals and families, and the less care delivered, the lower the premiums. I don't see what would prevent those vendors from suggesting each and every injured or ill worker or dependent tried bed rest and over the counter drugs for two weeks, then an x-ray or basic lab test, and only then would they get to see a diagnostician.

What does this mean for you?
Health care reform based on an individual market would work against employers' desires and needs, and over the long term, against the nation's best interests.

Posted by at 6:55 AM | Permalink | Comments (8)

Bob Laszewski posts today on the Center for American Progress' report on the additional costs inherent in Sen McCain's health care plan.

Bob - one of the most insightful people in the industry - notes:

"It's interesting that when I am out in the country meeting with insurance execs in their conference rooms--people who do understand the market--it never fails that they all just roll their eyes at the lack of sophistication when we discuss McCain's market-based solution--specifically his individual health insurance product ideas."

And this demographic - well compensated executives - is one that you would think would be in favor of McCain.

I'd echo Bob's observation. Industry insiders may disagree with Obama's platform, but most agree that it is fairly well thought thru. In contrast, McCain's is superficial - by that I mean a few microns thick superficial.

Posted by at 10:25 AM | Permalink | Comments (1)

A while ago I posted on the use of distorted data by folks seeking to promote an agenda. Recently Insurance Newscast arrived on my virtual doorstep with a textbook example under the intriguing headline " Most Companies Oppose Single-Payer Health Care System, State Coverage Mandates".

The survey purportedly found that "Most U.S. companies do not support a single-payer health care system or state legislation mandating coverage[italics are mine]."

The press release noted that the number of respondents that did not support "Universal system such as single-payer" was 50%. What exactly does that mean? Did respondents not like universal coverage mandates, or a universal 'system', or single payer? Or all three? What is a 'universal system' exactly? Given the poor phrasing of the report, the reader is left with no idea what the results mean.

Further complicating matters is the position of the survey's sponsor, the National Business Group on Health on mandated universal coverage - they endorse it, unequivocally. To wit: "the National Business Group on Health announced today that it would support efforts to require individuals to have health insurance coverage for themselves and their dependent children." I know, this is an individual rather than employer mandate, but that distinction may well be lost in translation.

The reason for my upset should be obvious; the response to this survey of larger employers, co-sponsored by a widely-respected business group, will find its way into the popular press, to be bandied about by pundits and 'experts' while suffering further distortion along the way.

The question itself (which was not provided and not on the sponsors' websites, neither of which provided access to the detailed survey report) looks to be specifically designed to promote an anti-universal coverage, anti-single payer agenda.

This is neither helpful nor ethical, nor is it consistent with the stated objectives of the NBGH. If business groups and consultancies that promote themselves as objective want to be taken seriously, they need to do a much better job than this.

Note - I am no fan of single-payer, I am a fan of universal coverage, but have no idea what a 'universal system' is.

Posted by at 6:42 AM | Permalink | Comments (0)

Something has been bothering me about Sen. McCain's health reform proposal, but till yesterday I couldn't put my virtual finger on it. Something just underneath the coverage of the details of the McCa