An article in today’s New York Times discusses some of the issues inherent in the introduction of new medical devices and the quest for insurance reimbursement for same. Predictably, a spine surgeon accuses insurers of refusing to reimburse just to save money, insurers say they won’t pay until the device is proven more effective than alternatives, the manufacturer touts supportive studies and ignores less supportive data, and patients are completely confused.
The article does an excellent job of laying out the issues in an even-handed manner, and actually alludes to the significance of any new technology’s demonstrated ability to improve on the present “state of the art” in the reimbursement decision process. However, that is about as far as it goes. The article, and other commentary in California HealthLine, does not delve into other alternative treatments and their associated benefits and costs for conditions addressed by devices such as artificial disks, stents, and pacemakers.
It strikes me that device manufacturers certainly have this kind of information, as it is likely part of whatever studies they do. If that assumption is correct, the data is either not reported, was not used by the reporter, or was inconclusive. is no discussion about the potential for the device to replace other medical treatments (e.g. pain meds, therapy, etc.).
Reimbursement decisions are one of, if not the key success measures for new technology – and the way to get payers to cover these new devices is to show the impact on patient outcomes, functionality, and/or lifestyle improvements as well as the elimination of other medical treatment and the costs thereof.
I must be missing something here.
What does this mean for you?
Before approving a new technology for reimbursement, ask what the impact on patient outcomes is, in addition to what other services/devices/procedures it replaces.

Health care inflation rates are unsustainable. Costs are now growing four times faster than wages, driven primarily by hospital pricing and drug utilization. The average family of four with health insurance now pays over $12,000 in health care related costs each year; their health insurance premiums alone are just under $11,000. The cost of health insurance has forced employers and employees to forgo heath insurance, causing providers to shift costs to their insureds, thereby raising premiums by $922 per family.
I have been speaking with several knowledgeable individuals about these issues, trying to puzzle out when the crisis will reach a point where it will be addressed in a meaningful way. One of the conversations has been with Bob Laszewski, one of the nation’s leading experts on health care policy, the insurance markets, cost drivers, and pragmatic approaches to all. In a recent conversation with Bob about health care cost drivers, he pointed out that the “leveling off” of the health care inflation rate is now affecting pricing for health insurance. Indeed, early indications are that large employers and health plans buying reinsurance (insurance to cover unexpectedly high losses from their members) are keeping rate increases somewhat lower than overall trend rates.
How is this happening? Simple, really. The

On a plane yesterday I engaged in a brief conversation with a professional woman (accountant) working for ING Insurance about health care. An opinionated person, she was quick to tell me that employer-based health care was the only solution and that government based programs were bad due to waste and long waiting lines for treatment.
When I pointed out that Medicare was one of the highest-rated “health plans” in the nation, with administrative expenses significantly lower than any other plan, she stated that the only innovation would come from private insurers, and that the “Clinton plan would have been a disaster”. She then proceeded to complain about the one-year waiting lists for surgery in the UK, and about the problems w the pharma reimbursement system in the UK and it’s refusal to pay anything for “profits”.
Here is a very intelligent, educated, numbers-oriented person who likely votes and contributes and is active, who has some serious misconceptions about health care, and absolutely no appreciation for the trade-offs inherent in health care. As an accountant I would have expected her to argue the cost-benefit of procedures or financing mechanisms, but her arguments were more based on the Health Insurance Assn of America (a now defunct organization)’s famed “Harry and Louise” advertising campaign.
There was no time to engage, and it would not have been productive – her mind was made up. When asked about how to handle the uninsured, she said that doctors should be required to do pro bono work, and then proceeded to complain about socialised medicine. Leaving aside the thought that requiring workers to do something for no compensation via governmental fiat smacks of socialism or communism for that matter, I was amazed at the complete lack of thought given to these obviously firmly-held beliefs.
If this is the kind of voter we have, than we are indeed a long way from addressing the problems inherent in our health care system.
What does this mean for you?

Likely continued frustration…

A conference on Cape Cod this weekend concluded that the US’ dependence on employer-sponsored health care is “fundamentally flawed, as it restrains productivity and leaves too many people without health coverage.” I could not disagree more.
Before we enter the debate, a few take-aways from the conference. Panelists noted the benefits of employer-sponsorship which include a drive for innovation and purchasing power together with the enormous costs of “de-coupling the employment link” (63% of non-elderly Americans are insured through their employers) make it quite difficult to shift away from the employer-sponsor system.
Sponsored by the Federal Reserve Bank, notables including Alain Enthoven of Stanford, Henry Farber of Princeton, and Henry Aaron of the Brookings Institute all view the link between employment and health insurance as a significant problem, with Enthoven noting “The employment basis of health insurance is hopelessly flawed.” Among these flaws are:
1. “companies are not in the business of managing health.” They are motivated to produce their particular good or service, and the “responsibility” of providing health coverage is a burden.
2. “Job-based insurance leads to distortions in the labor markets

Health care inflation was 8.2% in 2004 for privately insured Americans. This was 2.6% higher than overall economic growth, and almost twice as high as the general rate of medical inflation (4.4% in February) . The largest driver of health inflation was outpatient hospital, which increased 11.2%, while drug cost inflation moderated somewhat, coming in at 7.2% for the year.
The Center for the Study of Health System Change authored the report that is the source of these data, noting:
“Trends in four of the five spending categories