Tag: "Health Care Costs"

More on How Doctors Are Paid

One way the [Relative Value Update Committee (the RUC, pronounced “ruck” by health wonks)] figures out how much doctors should earn is by estimating how long it takes to do a particular procedure, like the average time of a colonoscopy. Those estimates, Whoriskey and Keating’s analysis suggests, are inflated. If those numbers are right, 78 doctors in Florida must work more than 24 hours a day to perform all the medical procedures they bill. One especially impressive doctor finds time for 50 hours worth of procedures in a given day. (More from Sarah Kliff)

Jul 25, 2013 | 14 comments | by

Lessons from New York

While the Obama administration is pointing to New York as an example of how well the health insurance exchanges might work, the Wall Street Journal editorial page is raising the possibility that the New York individual market today could be where the rest of country is headed. Since 1992, individual health insurance in New York has been guaranteed issue and community rated. Insures have been forced to sell to any willing buyer and they must charge the same premium, regardless of health status. As a result:

Premiums shot up 30% to 40% on average in the first year, often much more, and continued to spike. Insurers shed books of business, while customers cancelled their policies. Enrollment fell 38% in three years. About a dozen major insurers at the time sold the dominant style of indemnity coverage, similar to traditional fee-for-service Medicare. By 1996, everyone had fled the state…

In 1996 Albany tried to fix Mr. Cuomo’s mess by requiring any managed-care insurer doing business in New York to also sell on the individual market, but the market never recovered. In 1992, some 1.2 million New Yorkers bought individual plans, which fell to 128,000 by 2001, and a mere 31,000 today. Think about that: Out of 19.5 million residents, and with three out of every 15 nonelderly adults uninsured, 0.0016% of the population uses this market.

Jul 25, 2013 | 18 comments | by

About 1.4 Million Americans Have Mini-Med Health Insurance

And that may not change according to a report in Politico:

Skinny plans will have to cover preventive services like vaccines and cancer screenings without any cost-sharing — a requirement of all insurance under the health law. They can’t put a cap on annual benefits, as limited benefit, or mini-med, plans typically do now. But the lack of a cap is largely symbolic because the plans don’t cover the services that run up medical bills…

And those who want more comprehensive coverage can still go to the exchanges, where they may be eligible for subsidies depending on their income.

“That may be a better option for employees who need better coverage,” Stover said. For those employees who do receive subsidies on the exchange, their employers would have to pay a $3,000 penalty, but it’s likely to be a smaller subset of the workforce, Stover said…

A Treasury Department official confirmed that properly designed skinny plans meet the requirements of the health care law.

Jul 18, 2013 | 12 comments | by

Race to the Bottom

Insurers are experimenting to find out what to offer in the exchanges. Answer: the healthy buy on price; the sick want full coverage and access to a full range of providers.

Blue Cross found the monthly premium was the most important thing for 48% of people, and one of the most important things for another 26%. It dwarfed other factors like prescription-drug coverage and copayments for doctor visits.

Forty-one percent of the Rhode Island consumers said they would sacrifice a broad choice of doctors and hospitals in order to save money, even if their own doctor might not be in the plan’s network. Overall, Blue Cross plans were chosen by nearly 60%.

The research is shaping Blue Cross’s decisions. The company is initially selling a “tiered” plan that requires consumers to pay more to see certain health-care providers, and next year it will roll out a new design with a smaller network, both approaches that can hold costs down.

The insurer also isn’t offering any platinum plans to consumers, partly because the simulation showed they tended to draw people with significant health needs, a particular concern if it’s the only competitor with a platinum product. (WSJ)

Jul 16, 2013 | 13 comments | by

Signing Up for CHIP in Pennsylvania

Two days after Erik Friedman was born, his parents applied for coverage under Pennsylvania’s universal Children’s Health Insurance Program. Six months later, they got it. What happened in between were 86 phone calls, two lost applications, a calculation error that tripled their income (and raised their premium), incorrect advice that they should (and did) drop their baby’s catastrophic health insurance to qualify, multiple promises of responses that never came, and collection agency letters for hospital bills, which, of course, hadn’t been paid. (More)

Jul 15, 2013 | 12 comments | by

Fee-For-Service Again

USA Today asked me to write a counterpoint to their editorial calling for the abolition of Fee-For-Service payment in health care. Their editorial is here, and my counter is here.

Unfortunately, USA Today did not show me the article I was responding to. Now that I have read it, I want to make a few other observations.

First, the paper thinks that putting physicians on salary would curb the problem of overtreatment. Yes, it might do that, and replace one problem with another — under treatment. Physicians might become clock-watchers, punching in at 9:00 and out at 5:00, regardless of patient need. While on the clock, they might slow-walk their services. After all, why hurry when you get the same pay regardless of how much work you do? Even factories have long figured this one out, preferring to pay piecework instead of flat wages.

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Jul 15, 2013 | 15 comments | by

Another Study Challenges Dartmouth

What Medicare spends from one city to the next across the U.S. is one of the thornier and more pressing issues in the national debate over how to slow health spending — and ease pressure on household, employer and public budgets. Previous research, notably by Dartmouth University researchers, has suggested that Medicare spending varies because doctors practice medicine differently (and not always well) across the country, and financial incentives encourage overuse of healthcare.

The latest volley suggests that nearly all communities are a mix of high- and low-cost spending. But communities with the highest overall costs across 10 conditions had a greater prevalence of most of those diseases than the lowest-cost communities. Seniors in high-cost locations were also more likely to have multiple conditions than those in low-cost locales.

Modern Healthcare.

Jul 12, 2013 | 15 comments | by

The American Way of Birth

The New York Times recently published a major article by Elisabeth Rosenthal on “The American Way of Birth, Costliest in the World.”

The article is full of the usual, “The U.S. can’t do anything right: every European country is better than we are,” whining (it’s curious that the Left doesn’t apply the same thinking to abortion policy), but once you get beyond all that, there is plenty of food for thought here.

For one thing, we’ve been told for decades that American patients aren’t very well informed or assertive, so we need sharp-penciled experts to manage our health care for us. The experts will get us the best deal, and we don’t have to worry our pretty little heads about it.

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Jul 11, 2013 | 38 comments | by

I Edit Austin Frakt’s List

It’s a list of statements economists are supposed to agree with (bolding and cross outs are mine):

  • Uncertainty about the timing of need for health care is and its expense are the reasons for health insurance.
  • Insurers have an incentive for favorable selection.
  • Insurance markets suffer adverse selection.
  • Competitive insurance markets will use all known information to price risk.
  • If regulation prevents premiums from reflecting risks, adverse selection will result.
  • Insured people use more care.
  • Insured people have better The relationship between health insurance and health outcomes is uncertain, but probably small.
  • Health insurance does not guarantee good health care.
  • The relationship between spending on health and health outcomes is also uncertain, but (at the margin) is probably also small.
  • Preventive care does not usually pay for itself.
  • Employees pay for all employer-based health benefits; they offset wages or other benefits.

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Jul 02, 2013 | 20 comments | by

Exchanging Medicaid for a Better Option in Georgia

A Washington Post article paints a dire picture for safety net hospitals in states that don’t expand Medicaid. The article uses Atlanta’s Grady Memorial Hospital as an example the plight of a hospital without expansion:

If Georgia expanded Medicaid, Grady chief executive John Haupert says it would cover more than 27,000 uninsured patients now seeking free medical treatment at the hospital. It also would have helped the hospital with an estimated $60 million economic boon.

What the article neglects to explain is that many of the people who would be forced into Medicaid will now have the opportunity to enroll in highly-subsidized, private coverage in the health insurance exchange. Private insurers in Georgia pay physician fees that are about 40% higher than what Medicaid pays for the same service. Using this ratio as a proxy for the higher insurance reimbursement, according to NCPA analysis Georgia doctors and hospitals would enjoy more than $2 billion over a decade in additional spending on the uninsured living at or above poverty compared to Medicaid if they had private coverage rather than Medicaid.

Jul 01, 2013 | 13 comments | by
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