July 23, 2010
10:55 am
Some bad ideas, no matter how firmly they are rejected, just refuse to go away. Like Dracula, they continue to rise from the dead. The so-called public option for health insurance is one such ill-conceived concept that keeps clinging to life.
Here’s the latest. The Congressional Budget Office was requested to analyze a proposal in which a government-run health plan would be added to the health insurance exchanges that will be created under the new health reform law, the Patient Protection and Affordable Care Act. CBO came back with a finding that doing so would reduce federal deficits through 2019 by about $53 billion — $37 billion through reduced subsidies to exchange participants because they would be selecting the lower-priced government plan and $26 billion in increased tax revenues because a greater share of employee compensation would be in the form of wages and salaries instead of non-taxable health benefits.
Noam Levey, the excellent health policy reporter for the Los Angeles Times, wrote this week that, with the CBO report in hand, 128 members of the House of Representatives are pushing to reconsider the public option idea that was cast aside during the health reform debate. The rallying cry for resurrecting the public option is now deficit reduction.
No matter what rationale is used, though, for advocating a public option, the fatal flaw in the argument remains the same.
A government-run health plan does not save money through some mystical efficiencies that private plans can’t find. It simply pays physicians and hospitals less money. Medicare and Medicaid pay providers less than the actual cost of providing care. They make up that shortfall by shifting costs over to private payers, thus increasing healthcare costs for employers and individual health insurance purchasers.
CBO estimates 13 million people would opt for the government-run health insurance plan. Public option advocates say the end result will be lower deficits and reduced consumer costs. But they know better. It’s not a reduced cost burden. It’s a transference of that burden to private payers.
CBO’s report doesn’t change the fact that the public option is just as bad an idea now as it was during the health reform debate. Can we please just put a stake in this thing?
July 21, 2010
5:23 pm
Yesterday, the Arkansas surgeon general told a state legislative committee that the state’s physician shortage would be worsening once health reform is implemented. Dr. Joe Thompson testified that 80 to 90 percent of Arkansas’ 500,000 uninsured residents will become newly insured, most of them through an expansion of the Medicaid program. He emphasized that the state already has severe doctor shortages in its rural areas.
At the same time, Physicians News Digest is quoting a report by the New Jersey Council of Teaching Hospitals which projects that New Jersey will have a shortage of approximately 2,800 physicians (and as many as 3,250) by the year 2020. In New Jersey, health reform will add roughly 1.3 million patients to the newly-insured rolls. The Council projects severe shortages in primary care as well as neurosurgery and pediatric subspecialties.
We’re going to be hearing more warnings like these, most likely from every state. There’s no debating that addressing the uninsured problem in America is a good and necessary thing. But, we can’t be complacent in believing that expanded coverage necessarily leads to expanded access. It’s quite clear that our rapid increase in covered individuals is going to outpace the supply of physicians, nurses and other healthcare professionals able to provide care. As policymakers revisit health reform, which it inevitably will, addressing these shortages has to be an urgent priority.
July 09, 2010
2:44 pm
Let’s begin with a couple of basic truths.
First, that government-imposed price controls are antithetical to genuine, consumer-focused health reform. The only way to achievable sustainable reform that improves health outcomes and contains cost is through medical innovation, developing new treatments, technologies and medications to keep people healthier and making healthcare more cost-effective.
The second truth is that the health reform process taking place right now will not follow a simple linear path. Regulators and lawmakers will face a number of forks in the road and will have to make decisions that will determine the ultimate course of reform and the way patients and health providers will be affected.
With those premises in mind, it’s becoming increasingly clear that health reform at the national level must avoid some of the paths being taken by the state of Massachusetts.
A Wall Street Journal op-ed piece this week by Joseph Rago points out that while the Bay State has succeeded in its goal of achieving an insured populations (not counting those who are gaming the system by buying insurance, keeping it long enough to avoid state penalities, and then dumping it), cost containment has not been accomplished. Consequently, state politicians are trying to force costs down through government controls.
Governor Deval Patrick’s insurance commissioner has rejected the vast majority of requested premium increases submitted by state insurers. These increases are deemed necessary to cover expected claims, with health costs rising at eight percent annually. With these artificial price caps in place, insurers are essentially being forced to sell their products at a financial loss.
A state appeals board has reversed many of these price controls, saying they ignored “economic realities” – “economic realities” being the fact that three major insurers are now under administrative oversight because of concerns about their financial viability.
And now, the governor wants to extend this rate review process to cover hospitals and physician groups, which could effectively impose the same price controls on providers that are currently undermining health insurers. Also, as Rago points out, the state is using its “determination of need” process to restrict the use of certain medical technologies.
At a time when our population needs improved access to insurance, a growing supply of healthcare providers and medical innovation that can achieve long-term quality improvements and cost reductions, government price controls take us farther away from all of those goals.
What we’re learning from the Massachusetts experience is that there are certain roads that deserve to be less traveled.
July 08, 2010
10:48 am
According to statistics released yesterday by the American Cancer Society, cancer death rates have continued what is now an almost two decade decline.
The Society tells us that, since 1991, cancer mortality rates among men have dropped 21 percent, while women’s rates have declined 12 percent since 1992.
This success can be attributed to a number of factors. Healthier lifestyles and a reduction in the number of people who smoke have certainly contributed. But so has the ability to detect the signs of disease earlier before it has had a chance to progress. And improvements in treatment have meant that a cancer diagnosis is, more often than in the past, not a death sentence.
The promise of health reform is that more people will have health coverage and, thus, have access to early diagnosis and treatment. The reality is that we need to make sure that coverage does indeed equal increased health access, and that we strengthen support for healthcare innovation so that the future will see more development of treatments and technologies that will eventually defeat this disease for good.
July 07, 2010
7:49 am
We’re not going to comment in this space on the political wisdom of President Obama’s decision use a recess appointment to install Dr. Donald Berwick as head of the Centers for Medicare and Medicaid Services, thus bypassing the Senate confirmation process. What was certain to be a contentious confirmation debate will now be a contentious debacle on cable talk shows over the merits of using recess appointments for controversial nominees.
We’ll elect not to engage in that particular crossfire. Instead, we want to offer Dr. Berwick not only best wishes in his new position but, more importantly, the advice, counsel and support of leaders from all sectors of American healthcare.
Dr. Berwick has a big job in front of him. Not only has CMS been without a permanent head for far too long, since 2006, but Dr. Berwick will find himself as a point person in the implementation of health reform. CMS will be in the center of one of the most essential components of reform, achieving progress in changing our healthcare delivery and payment systems to focus on quality and value. Fortunately, as HLC members know from our meetings with him, this is a topic on which Dr. Berwick has profound expertise and unbridled enthusiasm.
Making headway on healthcare delivery reform will depend, in large part, on building upon the successes that private sector health providers have already achieved. We stand ready to share these examples with Dr. Berwick and his CMS team and to collaborate with him in moving toward an innovative, consumer-centered, results oriented healthcare system.
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