New research published in the JAMA Internal Medicine journal supports, with rigorous data analysis, that hospital ownership of medical practices drives up costs:
Among the 240 Metropolitan Statistical Areas, physician-hospital integration increased from 2008 to 2012 by a mean of 3.3 percentage points, with considerable variation in increases across MSAs. For our study sample of 7,391,335 nonelderly enrollees, an increase in physician-hospital integration equivalent to the 75th percentile of changes experienced by MSAs was associated with a mean increase of $75 per enrollee in annual outpatient spending from 2008 to 2012, a 3.1% increase relative to mean outpatient spending in 2012). This increase in outpatient spending was driven almost entirely by price increases because associated changes in utilization were minimal (corresponding change in price-standardized spending, $14). Changes in physician-hospital integration were not associated with significant changes in inpatient spending ($22 per enrollee) or utilization ($10 per enrollee).
(Note: I have edited out the measures of statistical significance from the abstract, for ease of reading.)
Continue reading Hospital Ownership of Physicians Drives Up Costs →
This blog has never gotten very excited by Medicare’s Accountable Care Organizations (ACOs). ACOs are risk-sharing arrangements between Medicare and providers, which are supposed to save money through efficiency. As a concept, they are fine – certainly an improvement over the incumbent, Soviet-style fee schedule. However, it is unlikely that the government has the incentives to get the risk-sharing incentives right.
I had anticipated that ACOs might end “with a whimper.” The Centers for Medicare & Medicare Services (CMS) have released results of Pioneer ACO’s third year of operation and 2014 results for Medicare Shared Savings Program (MSSP) ACOs which launched in 2012 through 2014. While ACOs are hardly taking off like the administration hoped, they seem to have gained a foothold. Continue reading Are Medicare ACOs Gaining A Foothold? →
America’s Health Insurance Plans (AHIP), the main trade association for health plans, has released research comparing pharmacy costs in states where Medicaid pharmacy benefits are “carved in” versus “carved out.”
“Carved in” means that a managed care organization manages the benefit. “Carved out” means the Medicaid bureaucracy manages it directly. The latter costs a lot more:
- Across 28 states using the carve-in model, the net cost per prescription was 14.6%lower than the average net cost per prescription in states not carving in pharmacy.
- This 14.6% differential created a $2.06 billion net savings in state and federal expenditures in FFY2014 for states deploying the carve-in model.
- The seven carve-out states had a 20% increase in net costs per prescription from FFY2011-FFY2014 — in stark contrast to the 1% increase in net costs per prescription experienced by the 6 states that recently switched from a carve-out to a carve-in model.
- The seven carve-out states “missed” a total of $307 million in savings in FFY2014 which would have occurred had they used a carve-in model.
Under the heading “Managed Care: Get Used to It,” he writes:
The question is not managed care versus the status quo, but which opportunities — and the restrictions that go with them — we are prepared to accept. When will we acknowledge that our government — or, for that matter, our insurance companies — can’t pay every bill? We’re in denial, and the longer we wait, the more painful the solution will be.
We have previously reported on the tremendous success of pilot programs in which the Medicaid homebound disabled are able to manage their own health care dollars (think: HSAs for the chronically ill). What about managed care? Here are the study’s principal findings: Mandatory Medicaid managed care enrollees are 24.9 percent more likely to wait more than 30 minutes to see a provider, 32 percent more likely to report a problem accessing a specialist, and 10 percent less likely to receive a flu shot. (HT to Jason Shafrin.)
Nation’s Centers for Excellence condemn what Congress is doing. Group includes Mayo Clinic and Intermountain Healthcare.
Goodbye to ERISA. After a five year grace period all employer health insurance will have to be approved by federal bureaucrats.
“Money gets you in the door.” For $20K, you can have dinner with Sen. Max Baucus.
You will be limited to a managed care plan, even if you and your employer are paying all the premiums.
This is from a New York Times report on President Obama's meeting to plan health care reform strategy with the governors:
Gov. Michael Rounds (SD): "I think [the president] said what we have to do is not call it rationing, because clearly there is from H.M.O. days a concern about rationing."
Gov. Christine Gregoire (WA): The president reminded the governors that "Congress has a bad taste in its mouth from previous experience with managed care," and suggested they avoid the term. Instead, he spoke of "evidence-based care," the practice of using research to guide medical decisions.
Yes, according to a Cato Institute Briefing Paper:
Treating a complex patient is comparable to building a house. The work of a number of skilled craftsmen needs to be planned and managed. When unexpected problems occur, someone needs to revise and adapt the plan. In constructing a house, that role is played by a general contractor.
[However, in medicine] it is as if the concrete contractor, the drywall contractor, the electrician, and the plumber all refuse to work under a general contractor. Instead, they each try to do their jobs independently, regardless of the impact on the rest of the project. No one craftsman is in a position to take responsibility for delivering the overall finished product, and quality suffers as a result.
Health Care Policy and Reform Insights | NCPA
