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Part D and Healthcare’s Future

December 24, 2010
2:07 pm

There’s just one week left in the open season for the Medicare Part D open season, the time in which beneficiaries can join a Part D plan or engage in comparison shopping — using Medicare’s PlanFinder tool — to make certain they have the plan that offers the greatest value.

This is also a good time to take note of the lessons we learn from the Part D program as policymakers work to improve the nation’s healthcare system.  Part D has shown us that a public-private partnership can achieve high approval among beneficiaries and costs below original projections.

I thank The Hill publication for giving me the opportunity to discuss this in an op-ed piece.

And for all Prognosis readers, I wish you a happy and fulfilling holiday season.

The Week’s Headlines and Underlying Realities

December 22, 2010
10:42 am

A couple of developments this week on Capitol Hill and in the federal executive branch warrant comment.

On the legislative side, the U.S. Senate voted this week, by a bipartisan 79-16 vote, to pass a continuing funding resolution that will keep the government operating into March.  By simply extending the 2010 continuing resolution, which did not include funding for the new health reform law, Congress has, in essence, defunded implementation of the reform measure, at least for now.

This may cause celebration in some circles and the gnashing of teeth in others.  The fact is, though, that a stopgap funding measure passed in relative haste during a lame-duck session of Congress is no substitute for a full-fledged discussion on what aspects of the Affordable Care Act should be preserved and what needs to be revisited and revised. That’s a dialogue that needs to take place in the 112th Congress.

While this action was taking place on the Hill, HHS Secretary Kathleen Sebelius was announcing new health reform regulations that would force health insurers to publicly disclose any rate increase requests of 10 percent or higher and justify them to state officials.  HHS would be able to step in and scrutinize increases if it determines states were not adequately acting upon these responsibilities.

There’s nothing wrong with transparency in coverage rate increases.  Likewise, there’s nothing objectionable in state oversight.  The vast majority of states already do so.  There is concern, though, about the prospect of injecting politics and interest group pressure on a process that should be guided solely by the need to strike a balance between affordability for consumers, the trajectory of healthcare costs and the imperative to maintain insurer solvency and viability.   Given the fact that the CMS actuary projects that health costs will continue to escalate under health reform, and sluggish economic growth is keeping many young workers out of the health insurance market, it’s inevitable that premiums will go up.  Regulations shouldn’t run counter to that reality.

Heart Disease: Good News and Disturbing Trends

December 16, 2010
11:16 am

A new study released this week offers the encouraging news that death rates from cardiovascular disease have declined 28 percent since the late 1990s.  That speaks well for the strides made by various health industry sectors in developing improved treatments, drugs and technologies to help those with heart disease live longer lives.

The news isn’t all good, however.  According to the study’s lead author, Dr. Veronique L. Roger of the Mayo Clinic, “there are also more costs in terms of dollars and in terms of the cost to individuals who are living with heart disease instead of disease-free lives.”

Dr. Roger’s research shows that the cost of preventing and treating heart disease in 2007 was an estimated $286 billion, more than was spent to treat cancer cases or any other diagnostic group. 

This drives home the point that no matter what the United States does in health reform to expand coverage and encourage more cost-efficient medical practice, it will be a very difficult task to get healthcare costs under control if we don’t take bold steps to attack the rising incidences of chronic disease.

The rising cost to treat heart disease has many factors, not the least of which are the facts that two-thirds of American adults are overweight or obese, more than 36 percent have prediabetes and approximately one in every five individuals still smokes.  A number of workplaces are having tremendous success with various fitness and wellness incentive programs, achieving healthier labor forces.  More than ever, we need to implement the best of the wellness lessons we’ve learned in our communities, our schools and our workplaces.  This new study further reaffirms the link between healthcare costs and preventable chronic disease.

“It’s Not Etched in Stone”

December 10, 2010
3:04 pm

ron-williamsOne of the great privileges I’ve had at the Healthcare Leadership Council has been the opportunity to work with Ron Williams, a member of HLC’s executive committee and chief executive of Aetna until he retired from that position last month.  Throughout the debate over health reform, Ron’s voice has been one of the most insightful on the issue, in terms of both the need for reform as well as the shortcomings in the new law.  His views were in the spotlight in the New York Times this week.  The article that emerged from his interview with Reed Abelson is certainly worth reading.

One of the most important points Ron makes is that it’s still essential to improve the health reform law, even as it’s in the process of being implemented.  As he said, “There are many opportunities to change the law.  It’s not etched in stone.”  Even some of the law’s most fervent advocates would acknowledge that it doesn’t do enough to address the issue of cost.  We also need to look at ways to accelerate necessary delivery reforms and strengthen medical innovation.

On the topic of affordability, Ron cites the law’s new taxes on health insurers, but he could have just as easily been talking about the legislation’s taxes on medical devices as well, when he said, “You can’t make the product more affordable by putting taxes on it.”

The article also contains Ron’s thoughts on the individual mandate, the healthcare system’s workforce needs and the imperative upon policymakers to be prudent and practical in implementing such significant change.

More From McAllen: Medicare, Private Insurers and Containing Costs

December 08, 2010
11:48 am

Last year, Atul Gawande wrote an article in The New Yorker that was probably quoted more often in the health reform debate than any other news item.  He looked at McAllen, Texas, which he called “one of the most expensive healthcare markets in the country,” because its $15,000-per-beneficiary Medicare costs in 2006 were more than double the national average.

In a study published this week by Health Affairs, researchers from the University of Texas and Dartmouth College have found that the same high-spending issues connected to Medicare patients do not extend to the under-65 population with coverage from private plans.  To conduct the study, the researchers utilized 2008 claims data from Blue Cross Blue Shield of Texas, the state’s largest private insurer.

The comparisons are striking.  For Medicare patients, inpatient care spending in McAllen is 63 percent higher than in nearby El Paso and more than four times greater for home healthcare.  Yet, for the under-65 patient population, spending on professional and inpatient services in McAllen and El Paso is virtually even, and spending in McAllen for outpatient services is even 31 percent less than that in El Paso.

In looking for reasons for the disparity, the study authors point to utilization mechanisms that private insurers rely upon.  For example, Blue Cross Blue Shield of Texas (which, to be completely transparent, is administered by the Health Care Service Corporation, a Healthcare Leadership Council member), encourages participation in disease management programs for patients with expensive chronic illnesses.  They also encourage providers to practice evidence-based medicine.  Medicare, by contrast, exercises comparatively little utilization management.

This study in Health Affairs is extremely valuable as policymakers consider how to address the cost challenges in the healthcare system and how to make the Medicare program more cost-effective.