February 15, 2011
11:35 am
Now that gasoline is over three dollars a gallon, I wince a little every time I fill up my car. It would be nice to have the power to simply decree that gas prices be 50 cents lower, but I understand that my pocketbook preferences do not take precedence over basic marketplace factors that range from the cost of oil exploration to rising energy demand in China and India.
There is still an insistence on the part of some, though, that governments should set healthcare prices (more than is already the case in Medicare and Medicaid), regardless of actual cost of producing and delivering healthcare goods and services.
This issue arises because of a report from Boston’s National Public Radio affiliate, WBUR-FM, that the Massachusetts Governor may ask the state legislature for the authority to set the rates that hospitals can charge. That authority would kick in if, after three years, hospitals are requesting increases of more than two percent.
This idea of government setting prices is, of course, neither new nor limited to the Bay State. During the debate over health reform, proponents of a government-run health insurance option cited Medicare as a model of “efficiency” because it establishes the payment levels that physicians and hospitals can receive. That’s fiat, not efficiency. Similarly, there are constantly proposals bandied about to affix price ceilings to virtually every healthcare sector from insurers to pharmaceuticals to medical devices. That’s also the problem with the Independent Payment Advisory Board, scheduled to be implemented as part of the Affordable Care Act. It’s an entity empowered to slash healthcare spending without regard to achieving greater quality or value.
The problem with having government simply decree what any one sector may charge for its services is that this approach ignores the interrelationship between insurers, providers, manufacturers and consumers in determining the value of healthcare services. It also undermines the ability of health system participants to provide greater value through innovation.
There’s no question that we do need to focus on improving healthcare’s affordability. The way to do that, though, is through new, innovative health delivery mechanisms, a greater reliance on evidence-based medicine, a more intense focus on wellness and prevention and strengthening the ability of consumers to be discerning healthcare shoppers.
For government to simply declare that certain prices must be lower may bring a measure of short-term relief, but there’s a price to be paid, whether it’s in the form of cost-shifting, reduced access, impaired quality or less innovation. Just saying a cost is lower isn’t the same as actually making it lower through marketplace mechanisms or greater ingenuity.
November 29, 2010
12:23 pm
Some in the news media are simply determined to portray the healthcare industry, or at least individual sectors of it, as strident opponents of health reform, no matter how strongly the facts state otherwise.
A recent example came earlier this month when CIGNA CEO David Cordani spoke at a Reuters health conference and said that he did not think it was in “society’s best interest to expend energy on repealing the (health reform) law.” That led to a series of articles expressing various degrees of surprise that health insurers weren’t actively trying to repeal the Affordable Care Act.
It would be nice to get this straight, once and for all. No sector of the healthcare industry – and I feel safe in making this assertion since the membership of the Healthcare Leadership Council includes companies from virtually every sector – has stood against comprehensive improvement of the U.S. healthcare system or against making certain every American has access to affordable health coverage.
Too often, news reports wrongly describe disagreements about aspects of the new health reform law as outright opposition. We don’t agree, for example, that expanding Medicaid is the best means for reducing the uninsured population, and we have concerns about the impact of the forthcoming Independent Payment Advisory Board. But neither the HLC nor any other major healthcare association has asserted that the status quo should be preserved.
In fact, it’s often forgotten that leaders from the health insurance industry were calling for reform and a fully-insured American even before President Obama moved into the White House.
To this day, health industry leaders are working to improve the reform law, at the risk of having these actions described as trying to oppose it, repeal it, or undermine it. In actuality, we have deep concerns over any steps that would repeal mechanisms to have more people acquire health insurance, while keeping intact the Affordable Care Act’s health insurance system reforms. That would cause extreme market instability and harmful price increases.
So, next time a health industry leader gives a speech in which they say they’re not in favor of repealing the health reform law, let’s not treat it as a man-bites-dog story, ok?
November 08, 2010
4:26 pm
…to hold, that is, the entirety of the health reform debate.
While Republicans and Democrats on Capitol Hill are still sorting out the reverberations from last Tuesday’s elections and what it means in terms of legislative strategies to repeal or pare back the Affordable Care Act, it’s becoming increasingly clear that the states are going to play their own important role in this process.
Texas state legislators, for example, are contemplating dropping out of the Medicaid program and instead creating their own state-run healthcare program for low-income citizens. This is no idle rhetoric. The Texas Health and Human Services Commission is going to release a study within the next couple of months on the effects of ending the state’s Medicaid participation, and the Heritage Foundation has already weighed in with a study estimating that Texas could save $60 billion between 2013 and 2019 by withdrawing from Medicaid and the Children’s Health Insurance Program.
This isn’t a step that Texas can take lightly. If a state-run alternative is a smaller, leaner version of Medicaid, hospital emergency rooms in the state could see an escalation in the number of Texas using the ER as a healthcare access point. Yet, the fact the debate is occurring shows the concerns states have about the Medicaid expansion that is a centerpiece of the Affordable Care Act. Texas legislators said that, with the federal government tying their hands on the ability to change eligibility or benefit structures, the program will become increasingly unaffordable.
And with Republicans taking over more governorships and state legislative bodies in 2011, it’s very likely that the GOP will flex its muscles on state-level implementation issues, such as those affecting the creation of health insurance exchanges. This was the subject of a discussion on CNN’s State of the Union program this weekend with outgoing Minnesota Governor Tim Pawlenty (R) and re-elected Texas Governor Rick Perry (R). They made it clear that Republican leaders beyond the Beltway won’t stand on the sidelines when the health reform fight re-ignites.
August 13, 2010
9:53 am
We should be concerned about a report this week in the Journal of the American Medical Association (JAMA), which presents a picture of increased crowding in the nation’s hospital emergency rooms, with Medicaid patients making up the lion’s share of the rising demand for ER services.
According to JAMA:
• The number of patients visiting emergency rooms rose from 95 million in 1997 to 117 million in 2007. This 23 percent increase in a decade significantly exceeds what could have been reasonable expected based on population growth.
• In 1999, there were almost 694 ER visits, on average, for every 1,000 Medicaid enrollees. In 2007, there were over 947 visits for every 1,000 individuals on Medicaid.
• The ER visit rate stayed relatively stable over that time period for Medicare patients, the privately insured and even the uninsured, telling us that Medicaid beneficiaries are driving the growth in emergency room traffic.
With Medicaid expansion playing such an important role in the implementation of health reform and the projected decline in the nation’s uninsured population, the JAMA study takes on great importance. Because Medicaid pays such comparably low reimbursement rates to physicians, many doctors won’t see Medicaid patients. This increase in patient traffic has caused ER wait times to jump by 50 percent during the 1997-2007 period examined in the study.
As the study’s authors wrote, it is a “critical concern” how emergency rooms are going to deal with the 16 million Americans who are expected to be added to Medicaid rolls once health reform is fully implemented.
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.
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