Universal health care and the Iron Triangle myth of U.S. policy makers
Donald Light on the Iron Triangle Myth
By Donald LightResponse to the October 4, 2012 Quote of the Day on the meme of access, cost and quality (http://www.pnhp.org/news/2012/october/aaron-carroll-repeats-meme-of-acce...):
In my comparative studies of universal health care systems, I find their cost/quality profiles vary quite a bit between each other, and over time for the following reasons. The more such systems pay by fee, the more providers drive up costs in the name of "quality" from which they profit, such as Germany from after World War II up to the 1980s. The Canadian system has been suffering from this seeming trade-off for decades. Access stays universal but there seems to be "an iron trade-off" between cost and quality, until systems start moving towards bundled payments and then population-based capitation or salary within a national health service and an ethos of shared responsibility to improve quality within a fixed budget. (Notice the so-called "iron triangle" has faded from view.)
http://www.pnhp.org/print/news/2012/october/universal-health-care-and-the-iron-triangle-myth-of-us-policy-makers
Doctors split on value of low-back injections
The discovery that a potentially tainted drug is linked to 119 cases of meningitis nationwide has fueled debate among doctors about widespread use of the back-pain treatment, which has little proven longterm benefit.
Use of the medication, a steroid injected near the spine to quell inflammation, has increased in part because of the demands of an aging population and the relatively few risks associated with the injections when compared with surgery and other treatments, which also carry no guarantee of success.
Patients and doctors often saw a so-called lumbar injection as a safe alternative, until the outbreak of fungal meningitis cases tentatively linked to the injectable steroid supplied by a compounding pharmacy in Framingham.
A health care disaster
The dangerous effects of a lack of robust federal supervision
By Tim Johnson
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OCTOBER 10, 2012
I have had the privilege of interviewing both President Obama and former Massachusetts Governor Mitt Romney about health care reform. I say “privilege” because I found them both to be well-informed and deeply concerned about needed changes in American health care. And as many have observed, I also found the two key elements in each of their plans — mandated insurance and insurance exchanges to make choices easier — to be almost identical in concept.
However, given that the presidential campaign is very much about the role of the federal government in our lives, it is not surprising that there is a huge difference between them in terms of that role in health care — as was clear in the first of the presidential debates. Today, Romney tries to distance himself from the strong government role in his Massachusetts plan with a states’ rights mantra: His plan was good for his state then, but every state should develop its own plan. But when it comes to “life and death” sectors in our economy, it may be that states’ rights can be dangerous, even fatal.
Partners’ financial health turns on complex plans
Investment, debt key in its $7.5b portfolio
When Partners HealthCare, the big Boston hospital group, announces its financial results each quarter, what often stands out are not the gains and losses for providing medical services. It’s the investment and debt portfolios.
With $7.5 billion in assets under its watch — more than at most community banks — Partners feels the swerves of the stock market in a big way. And there’s another significant factor in the quarterly swings: a complex hedging strategy on Partners’ debt. Together, these are often the tail that wags the dog.
“We know we’re going to get these ups and downs,” said Peter K. Markell, chief financial officer and treasurer at Partners. His goal is to not let the volatility affect the business of delivering medical care. “The main focus of everyone is the mission — patient care, research, teaching, and service to the community.”
New Style of Health Care Emerges to Fill Hospital’s Void
By ANEMONA HARTOCOLLIS
The demise of St. Vincent’s Hospital in Greenwich Village two years ago has led to a struggle for health care supremacy in some of New York’s most distinctive neighborhoods, offering a glimpse, in the process, at what might be the future of urban medicine.
Without building a hospital, one large chain, Continuum Health Partners, is establishing a beachhead in Chelsea and the Village by connecting with outpatient clinics, trying to dominate the market and create a feeder network for its hospitals in other neighborhoods. It is joining forces not just with traditional clinics but also with newer experiments like doctors working out of drugstores. A competitor, NYU Langone Medical Center, is expanding its physician practices downtown, and like Continuum, it has hired dozens of stranded St. Vincent’s doctors.
Several walk-in “urgent care” centers have also rushed into the vacuum left by St. Vincent’s in Lower Manhattan, hoping to show that they are more efficient and consumer-friendly than a hospital-based system, but some have already begun to form relationships with the hospitals.
“We are still trying to figure out if we are a threat or an asset to each other, and we are probably both,” said Dr. Alicia Salzer, co-founder of Medhattan, an urgent care center that opened in 2011 near ground zero at Liberty Street and Trinity Place.
The immediate fight is to win market share, the loyalty and business of the area’s many affluent and well-insured residents. But the demise of St. Vincent’s has also turned Lower Manhattan into a laboratory for health care reform. The new clinics and the maneuvering by large chains are anticipating an expansion of the number of people with insurance and changes in the way that health care is delivered and paid for. And they are testing the notion, long held by health planners, that the city can survive with fewer hospitals.
Insurers Pursuing Billions in Medicare Profits Make Big Contributions to Candidates Backing Ryan Budget
Public Campaign Action Fund and Health Care for America Now
October 10, 2012
During the height of debate over the Affordable Care Act, America’s Health Insurance Plans (AHIP) publicly appeared to be negotiating with Democrats and the Obama administration while its members were secretly funneling more than $100 million to the U.S. Chamber of Commerce to oppose the legislation.
When Republicans won back the House Majority in 2010, insurance interests again took center stage when the House twice passed Rep. Paul Ryan’s (R-Wis.) budget plan that would turn Medicare into a voucher program that would deliver billions in new profits to health insurers while devastating a critically important program for America’s seniors.
A new analysis by Public Campaign Action Fund (PCAF) and Health Care for America Now (HCAN) shows that the same insurance interests that would benefit from a voucher program are filling the campaign coffers of Medicare privatization supporters, raising questions about whether these members of Congress are really working for their constituents or big insurance donors.
Private Health Insurance Exchanges––Will They Save Money? Will the Idea Grow?
Private health insurance exchanges will save employers money but not make health insurance cheaper.
Because private health insurance will save employers money, they will grow.
Will Private Insurance Exchanges Reduce Health Insurance Costs?
There's lots of buzz these days about private insurance exchanges. The idea is to give employees more choice in purchasing their own individual coverage from a big menu of insurance companies and plan alternatives, and as a result, create more robust competition and thereby help control costs.
But I think private insurance exchanges will have just the opposite effect on the price of large employer health insurance plans.
Because private health insurance will save employers money, they will grow.
Will Private Insurance Exchanges Reduce Health Insurance Costs?
There's lots of buzz these days about private insurance exchanges. The idea is to give employees more choice in purchasing their own individual coverage from a big menu of insurance companies and plan alternatives, and as a result, create more robust competition and thereby help control costs.
But I think private insurance exchanges will have just the opposite effect on the price of large employer health insurance plans.
How Insurance Companies Benefit from the Ryan Plan
A voucher program designed by Ryan and embraced by Republican presidential candidate Mitt Romney would be a boon to insurance interests by moving millions of seniors who join Medicare after 2022 into private plans partially funded by government vouchers.
Vouchercare would give insurers vast flows of new revenue and increase health insurance company profits by $16 billion to $26 billion in 2030. Here’s how Harvard economist David Cutler described it:
According to the CBO, people aged 65 in 2023 (the first year of the voucher) are expected to account for 4 percent of the $1.23 trillion in Medicare spending anticipated in that year … An estimated $31 billion in Medicare funds would be newly available to private plans in 2023. The GAO has estimated that insurers earn profits of between 4.1 percent and 6.6 percent on revenue. Thus, the newly available private insurer revenues would generate private profits of $1.3 [billion]–$2.1 billion in 2023. These profits would quickly mount. By 2030, new profits for private insurers would be as high as $16 [billion] to $26 billion.
The year 2030 may sound far off, but health insurance companies and Wall Street investors would see an immediate payoff if backers of Medicare privatization were to win big in November. A Romney-Ryan victory coupled with a Republican takeover of the Senate would boost health insurance company stock prices by 10 to 20 percent, according to Citigroup analyst Carl McDonald. Based on share prices on Aug. 18, the day McDonald published his report, a GOP sweep in Washington would quickly jack up the total market value of the 10 largest health insurers by $12 billion to $25 billion. Here’s how McDonald sees it:
We’ve argued that in the scenario where Mitt Romney wins the presidential election and Republicans take the Senate, the managed care group rises 10-20%, as the market factors in the likelihood that health reform implementation is delayed, scaled back, or that pieces are removed entirely, pushing up earnings forecasts in 2014 and beyond. We think the argument for how much the stocks could move is strengthened by the selection of Paul Ryan as the Republican vice president candidate, given Ryan’s widely publicized proposal to essentially privatize the federal Medicare program. Ryan has talked about changing the reimbursement methodology for Medicare Advantage plans, which creates some uncertainty, but that negative would be more than offset by a major increase in Medicare revenue if the bulk of the seniors in the country were ultimately moved into a private plan.
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