Health Wonk Review is well into its second year, and getting bigger with each bi-weekly edition. Jason Shafrin, renowned health care economist/blogger, hosts this fortnight’s effort.
Insight, analysis & opinion from Joe Paduda

Insight, analysis & opinion from Joe Paduda
Health Wonk Review is well into its second year, and getting bigger with each bi-weekly edition. Jason Shafrin, renowned health care economist/blogger, hosts this fortnight’s effort.
My post a couple of weeks ago about the RFP process generated a lot of public and even more private comment. It got me thinking about one of the more contentious issues in the vendor-customer relationship – price.
OK, another trip down Esoteric Lane, into the wierd world of WC drug management…
When states set high workers comp fee schedules for drugs, WC medical costs go up, and too many dollars are taken from employers and given to pharmacies and PBMs.
That’s exactly what an organization with the seemingly innocent title “Workers Comp Pharmacy Alliance” is working towards.
As part of a very good (defined as substantive, open-minded, and comprehensive) discussion on health care reform options going on at TPMCafe, Jonathan Cohn notes:
“a lot of these people don’t understand how precarious their current situation is – because they don’t realize how easily they could lose coverage or the extent to which their insurance might not cover their bills.(emphasis is mine) (Indeed, that’s the whole point of my book.) But for now, anyway, that’s what they think. And if you start telling them you’re going to change their health insurance – even for an alternative as well-liked as Medicare – a lot of them will get skittish.”
That’s true. But at some point, enough of “those people” who lose coverage or go broke paying bills will decide to do something about it. And that “something” doesn’t have to be national; I’m of the opinion that there will be real reform in more than one state years before we do something nationally.
But which ones, and why them?
Richard Eskow has a great synopsis of the historical roots of capitation over at Sentinel Effect – brief, entertaining, and well worth the click-thru.
An effort in Connecticut to implement a single payer, universal coverage program is just about dead, after the state’s Office of Fiscal Analysis determined it would cost as much as the entire state budget.
Politicians were shocked by the estimated total cost, which ranged from $12 billion to $18 billion.
I’m shocked that they were shocked.
TPMCafe has an ongoing debate amongst health policy types about the pros and cons of single payer. There’s an all-star cast, and your lunch hour is coming up, and you’re kind of wondering why single payer is good/bad…
Jason Shafrin reports on the link between physician compensation mechanisms and surgery rates.
Here’s the “money quote” –
“When specialists are paid through a fee-for-system (FFS) methodology rather than a capitation or salaried basis, surgery rates increase 155%. There is suggestive evidence that surgery rates fall when primary care physicians are paid on a fee-for-service basis compared to capitation or salaried payments.”
Not addressed is the key question – is the rate of surgery appropriate under either compensation mechanism?
I’m having a tough time getting mad at United Healthcare. The huge managed care company is under fire for penalizing docs who use any lab other than UHC’s preferred partner, LabCorp. The AMA, regulators, individual physicians, and a few consumer groups are all screaming about UHC’s heavy-handed, dictatorial infringement on their right to practice medicine.
They’ve got it all wrong.
If consumerism is going to work, the consumers are going to have to think about costs. Problem is, the real consumers (physicians) don’t think about patients’ out-of-pocket costs.
At least not when it comes to diagnostics and hospitalizations.