Another View: Health care reform act does not go far enough to meet needs
Obamacare is a step in the right direction, but universal health care should be the goal.
By KEVIN TINE
The recent election has made it a virtual certainty that the Affordable Care Act (aka "Obamacare") will be implemented. However, the ACA has serious shortcomings.
While the details are not certain, we do know that as many as 30 million people will still not have health insurance (Congressional Budget Office, July 2012).
Also, the ACA will probably not make health care more affordable, and costs will likely remain out of control.
While we are implementing the ACA, we should bear in mind that there are better solutions that should be considered, and perhaps could be fit into the framework of the ACA.
One is the Medicare program: Simply offering it to the entire population, rather than just seniors, would save significant amounts of money immediately, because its administrative costs are so much lower than those of insurance companies. Perhaps a Medicare-like plan could be included as an option in state or federal insurance exchanges. This might be possible under the waiver provisions of the ACA.
A Shortcut to Wasted Time
By LEORA HORWITZ
New Haven
A FEW years ago, we doctors kept handwritten charts about patients. Back then, it sometimes seemed like we spent half our time walking around looking for misplaced charts, and the other half trying to decipher the handwriting when we found them. The upside was that if I did have the chart in front of me, and I saw that someone had taken the trouble to write something down, I believed it.
Unfortunately, this is no longer the case. The advent of electronic medical records has been a boon to patient safety and physician efficiency in many ways. But it has also brought with it a slew of “timesaving” tricks that have had some unintended consequences. These tricks make it so easy for doctors to document the results of standard exams and conversations with patients that it appears more and more of them are being documented without ever having happened in the first place.
For instance, doctors used to have to fill out a checklist for every step in a physical exam. Now, they can click one button that automatically places a comprehensive normal physical exam in the record. Another click brings up a normal review of systems — the series of screening questions we ask patients about anything from nasal congestion to constipation.
Of course, you shouldn’t click those buttons unless you have done the work. And I have many compulsively honest colleagues who wouldn’t dream of doing so. But physicians are not saints.
Hospitals received $1 billion more from Medicare in 2010 than they did in 2005. They say this is largely because electronic medical records have made it easier for doctors to document and be reimbursed for the real work that they do. That’s probably true to an extent. But I bet a lot of doctors have succumbed to the temptation of the click. Medicare thinks so too. This fall, the attorney general and secretary of health and human services warned the five major hospital associations that this kind of abuse would not be tolerated.
Health Insurance Exchanges May Be Too Small to Succeed
By DANA P. GOLDMAN, MICHAEL CHERNEW and ANUPAM JENA
Dana P. Goldman is the director of the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California. Michael Chernew and Anupam Jena are professors of health care policy at Harvard University.
With the re-election of President Obama, the Affordable Care Act is back on track for being carried out in 2014. Central to its success will be the creation of health-insurance exchanges in each state. Beneficiaries will be able to go a Web site and shop for health insurance, with the government subsidizing the premiums of those whose qualify. By encouraging competition among insurers in an open marketplace, the health care law aims to wring some savings out of the insurance industry to keep premiums affordable.
Certainly, it is hard to be against competition. Economic theory is clear about its indispensable benefits. But not all health care markets are composed of rational, well-informed buyers and sellers engaged in commerce. Some have a limited number of service providers; in others, patients are not well informed about the services they are buying; and in still others, the quality of the service offerings vary from provider to provider. So the question is: What effect does insurer competition have in a marketplace with so many imperfections?
The evidence is mixed, but some of it points to a counterintuitive result: more competition among insurers may lead to higher reimbursements and health care spending, particularly when the provider market - physicians, hospitals, pharmaceuticals and medical device suppliers - is not very competitive.
In imperfect health care markets, competition can be counterproductive. The larger an insurer's share of the market, the more aggressively it can negotiate prices with providers, hospitals and drug manufacturers. Smaller hospitals and provider groups, known as "price takers" by economists, either accept the big insurer's reimbursement rates or forgo the opportunity to offer competing services. The monopsony power of a single or a few large insurers can thus lead to lower prices. For example, Glenn Melnick and Vivian Wu have shown that hospital prices in markets with the most powerful insurers are 12 percent lower than in more competitive insurance markets.
So health insurance exchanges are probably welcome news for hospitals, physicians, and pharmaceutical and medical device companies throughout the United States. If health insurance exchanges divide up the market among many insurers, thereby diluting their power, reimbursement rates may actually increase, which could lead to higher premiums for consumers.
- Don McCanne
- San Juan Capistrano, CA
It is true that very large insurers within the exchanges can use their monopsony power (controlling the market as exclusive buyers) by demanding lower prices for health care services, but only for their own plans. Most health care costs will still be covered by employer-sponsored plans, Medicare, Medicaid and other programs. Thus plans offered by the exchanges cannot have much impact on our total national health expenditures.
Another difficulty with the monopsony power of private insurers is that when they are investor owned (WellPoint, UnitedHealth, Aetna, etc.), their first priority must be to use their leverage to benefit their investors. That results in insurance innovations that often are not particularly transparent, but have adverse consequences for the patients they insure. The private sector exercising power as a monopsony can be as evil as a monopoly.
In contrast, a public monopsony can be very beneficial in getting prices right - high enough to ensure adequate capacity in the delivery system, yet low enough to ensure value in health care.
The ultimate beneficent monopsony would be a single public program covering absolutely everyone ("single payer"). We could achieve this easily by improving Medicare and then making it universal. Health policy studies have proven that this would not only cover everyone, but it would finally bring us that elusive goal of health care reform - bending the cost curve to sustainable levels.
Another difficulty with the monopsony power of private insurers is that when they are investor owned (WellPoint, UnitedHealth, Aetna, etc.), their first priority must be to use their leverage to benefit their investors. That results in insurance innovations that often are not particularly transparent, but have adverse consequences for the patients they insure. The private sector exercising power as a monopsony can be as evil as a monopoly.
In contrast, a public monopsony can be very beneficial in getting prices right - high enough to ensure adequate capacity in the delivery system, yet low enough to ensure value in health care.
The ultimate beneficent monopsony would be a single public program covering absolutely everyone ("single payer"). We could achieve this easily by improving Medicare and then making it universal. Health policy studies have proven that this would not only cover everyone, but it would finally bring us that elusive goal of health care reform - bending the cost curve to sustainable levels.
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