The new 401(k)s

Friday, August 15, 2008

I was pleasantly surprised, this week, by my periodic email from HSA Weekly. Usually, the publishers of this news compendium of Health Savings Account news send out articles intended to promote Health Savings Accounts and their crummy high-deductible health plans.

But this week, I got an article about how HSAs aren't doing all that well because consumers have been rightly wary of them.

The article sums it up well, but essentially, health care is a very complex system to navigate. The idea that "consumer choice'' and "cost-conscious'' behavior is going to drive down costs is ludicrous when you consider that:

a) the most expensive care (ie. emergency care) is not voluntary, nor do you have time to make "cost conscious'' decisions about which hospital you should go to when you're having a heart attack.
b) it's impossible to find price stickers on the care that we need
c) consumers aren't medical experts and don't know what care is most effective and less effective
d) "choice," as proponents of high-deductible plans like to promote, is not neccesarily a good thing. Think of how overwhelming it is to choose a flavor at Baskin Robbins.

Labels: CostContainment, Underinsurance

posted by Hanh Kim Quach | Permalink | 2:36 PM


 

Controlling costs, not curbing care...

Thursday, July 10, 2008

Our friends at CALPIRG recently released a new study on cost containment in health care.

It's described in opinion piece by CALPIRG's Michael Russo in the California Progress Report, and in an article by Keith Darce of the San Diego Union Tribune.

It's a useful compilation of the research out there on cost containment, brought together in a readable package. The core message is that there are significant ways to cuts costs beyond the typical attempts to cut costs by cutting care.

While there is no one silver bullet to bring down health prices, there are several strategies that, together, can have a big impact. Health Access has a one-page fact sheet on controlling costs with a similar message, but the CALPIRG report gives good policy detail, especially in areas about reducing regional disparities in health spending, in administrative duplication, and in prescription drug purchasing. It's worth a read.

Labels: CostContainment, InTheNews, OtherBlogs, Research

posted by Anthony Wright | Permalink | 6:12 PM


 

Cost containment bullets...

Tuesday, February 26, 2008

In the holy grail of cost containment, I've always thought that there isn't one "silver bullet," but there is a list of policy reforms (here's the Health Access one-pager) that can each bring down health costs somewhat, but that taken together, the savings over the long term could be significant.

Some of these reforms are ingrained in comprehensive health reforms: the negotiating power of large purchasing pools, the global budgeting of a single-payer system, or just the preventative aspect of getting everybody insured, and the reduction of the "hidden tax" of having the uninsured. Other elements, such as rate regulation, information technology, transparency of cost and quality, or encouragement of "best practices", are proposals that can be stand-alone, or part of broader reforms.

Joe Paduda at Managed Care Matters seems to have a similar philosophy on cost containment, and a similar list. In his post, he also goes through each idea, how Obama and Clinton fare in their proposals, how effective he thinks each strategy would be.

It's a pretty good and fair assessment, even if I might quibble on details. There are real cost containment elements in the Obama and Clinton plans: none are silver bullets, but together they can make a real difference.

Labels: CostContainment, OtherBlogs, PresidentialCandidates

posted by Anthony Wright | Permalink | 12:57 AM


 

Costing it out...

Wednesday, November 28, 2007

The new Health Wonk Review is up at Health Care Renewal, where our SCHIP post is spotlighted, along with several other posts from around the blogosphere.

An example is Maggie Mahar's HealthBeat critique of the New York Times' full-page editorial on rising health care costs.

I think the NY Times is right that there's no one silver bullet, but there's a legitimate set of proposals that each makes a difference, and together, can make a big difference. Health Access has a fact sheet describing an overlapping set of solutions to rising health care costs--which also dismisses ones that are phony answers as well.

I also agree with Mahar's critique of the NY Times on the details: Prescription drug prices are a bigger deal than you think; that the "skin in the game" idea is vastly overblown; etc. The overall point of nyceve's blistering attack on DailyKos is on point as well, that the insurers and their administrative costs and profits shouldn't be left off the hook.

So there's a lot of work to do. We may not be able to do all of it in one swoop, but let's get started!

Labels: CostContainment

posted by Anthony Wright | Permalink | 12:01 PM


 

Fact Check on AB8

Monday, September 10, 2007

The state Senate just concluded debate on AB8, which passed 22-17.

(Aside: All Republicans and Sens. Lou Correa, D-Anaheim, and Sheila
Kuehl, D-Santa Monica voted against the bill. Correa is the only Democratic
lawmaker to oppose any health reform measures this year.)

The bill now heads to the Assembly, where I'm sure all 80 lawmakers will want to get up and speak. Lest they planned to crib from Senators, I wanted to set the record straight on some of the erroneous statements made by their colleagues in the red-wing of the Capitol.

Myth: "I cannot remember a bill -- either minor or major -- that comes before the Legislature without any organization in complete support,'' (Sen. Sam Aanestad, R-Grass Valley)

Fact: Last week, AB8 underwent substantial amendments that dealt with controlling the rapidly increasing health care costs, and affordability of health coverage for consumers. After amendments on both those issues surfaced, a number of strong consumer voices -- such as Consumers' Union, Health Access, CalPIRG, AARP, Congress of California Seniors, Service Employees International Union, California Labor Federation, AAFSME and ACORN and other groups moved to support the bill.

Myth: "This plan does nothing to contain costs.'' (Aanestad). Sen. Dave Cox, R-Fair Oaks, also alluded to this.

Fact: Amendments added to the bill last Wednesday directly address the issue of cost containment -- something that the It's OUR Healthcare coalition has been asking for all year. We recognize that without without controlling costs, any health reform efforts would collapse under the weight of increasing health care expenses.
Cost containment provisions include:

• Preventing Californians from getting sicker by helping patients to affordably control chronic diseases. Asthma, diabetes and heart disease are among the biggest cost drivers in health care. Preventing and maintaining these diseases keep patients from getting sicker, and costing more money to treat. This means reducing co-pays and cost-sharing for doctor’s visits, lab tests and medications. High cost-sharing deters patients from seeking the necessary treatment and care for their diseases, causing their conditions to worsen.
• Requiring public reporting on health care costs, and the quality of services. By publicly reporting how well – or poorly – doctors, hospitals and other providers perform health care procedures, providers would be driven to improve quality, thereby saving lives and saving health system dollars. Better information on quality and cost can allow purchasers and consumers effectively purchase care that gives them value for each dollar they spend.
• Requiring the adoption of health information technology. Electronic records could help reduce costly errors due to poor handwriting, unclear instructions and other human errors. Technology could also help cut down on administrative costs.
• Reining in prescription drug costs. Prescription drug costs climbed an average three times higher than the rate of inflation from 1994 to 2006. AB8 allows the state to combine with other public entities and trust funds to create a purchasing program for prescription drugs, using the power of a larger group to help leverage lower prices for prescription drugs.
• Creating a public insurer that would compete for business with private insurers to help drive down costs. The public insurer, built on the foundations of California’s existing local initiatives, county-organized health systems, public hospitals and community clinics, would give Californians the option to obtain coverage from a publicly owned entity, such as a municipal utility.

Myth: Sen. Aanestad, in his speech on the Senate floor opposing AB8, also said the bill was "modeled on the Massachusetts plan.''

Fact: While AB8 certainly share certain features with the Massachusetts plan, one missing provision is glaringly obvious: the absence of an individual mandate. AB8 does not require anyone to have coverage if they can't afford it.
Here's how it would work: workers would be required to take up health coverage IF their employer pays for it and IF -- BIG IF, HERE -- the cost of health care (that includes premiums and out-of-pockets costs) does NOT exceed five percent of a worker's wages. That means a worker earning $41,000 a year would not have to pay more than $2,050 in premiums, co-pays, co-insurance and deductibles.

Labels: CostContainment, InTheNews, Perata, Republicans, YearOfReform

posted by Hanh Kim Quach | Permalink | 3:19 PM


 

Over There

Monday, July 16, 2007

I had the opportunity to attend a swanky event hosted by the California HealthCare Foundation with the German Minister of Health, Ulla Schmidt. Through a UN-like interpreter service, Ms. Schmidt described recent reforms that the country has taken to try and control skyrocketing costs.

Unlike some of their European counterparts that have universal healthcare system controlled by a central government entity, Germany’s system is based on coverage through private non-profits that arose out of sickness funds created in the late 1800s, that compensated workers in certain professions (who were required to pay into the system) from losing income when they got sick. Still, with this decentralized (and privatized) healthcare system, the country manages to cover 90 percent of its citizens.

As a result, Germany is struggling with many of the same issues of a private health care system that we are here – including the balance between regulation and encouraging free-market competition.

Perhaps we can borrow from lessons Ms. Schmidt has learned:
“Whoever calls for more competition in health services will usually not want that principle applied to themselves.’’

The system is now a patchwork of 292 sickness funds (down from 1,200 a decade ago) and workers can choose to move between the funds. The funds are required to contract with any applicant (guaranteed issue!). The result has been that younger, healthier and wealthier have fled to “sickness funds’’ that are cheaper (sound familiar?).

The way they’ve chosen to deal with this, Schmidt said, is that just this year, the federal government is starting to pool together all the contributions and distributing to the sickness funds based on the make-up of each funds subscriber base. So if one sickness fund has sicker people, then they’ll get enough money to assure that those people get proper preventive and maintenance care. This, Schmidt hoped, would take away the incentive for sickeness funds to design plans that attracted healthier people – AND reward efficient funds.

Funds that could take care of their members well – keep them healthy with existing dollars – would be rewarded. If they really used their money wisely, then they’d be able to refund subscribers

On the other side, inefficient funds that ran out of money would have to ask their subscribers for additional money. Those subscribers would then become disgruntled and be free to move to another plan.

Additionally laws in Germany require coverage and contribution based on income, mandate a very high level of benefits, and protect consumers from having to pay too much out of pocket already. We don’t have that here. But Schmidt said that’s the role that government plays – to assure those rules are followed.

In a sense, that’s what we’re trying to do this year: create more rules.

It was encouraging to hear from Schmidt, who presented ideas we might be able to borrow from.

Germany, however, has a very strong sense of solidarity among its citizens, that I’m not sure exists in all parts here, that could be more of a barrier for us. “Everybody has to contribute from their income to the health care system. That’s the principle. The healthy pay for the sick. The young pay for the old. The people with no kids pay for people with kids. That is the system.”

Labels: CostContainment, International, YearOfReform

posted by Hanh Kim Quach | Permalink | 2:43 PM


 

The "hidden" reasons for reform...

Tuesday, May 29, 2007

You don't have to be a fan of the New America Foundation to take sides with it over the unabashedly conservative Hoover Institution.

Dan Walters has a questionable column in today's Sacramento Bee that gives way too much credence to a Hoover study trying to downplay the notion of a "hidden tax" in health care.

The "hidden tax" is a phrase Governor uses a lot, to talk about the amount that health premiums are higher because of the uninsured population. The New America Foundation released a study last year often cited by Schwarzenegger. Families USA had a similar conclusion in 2005 with its study documenting "the increased cost of care."

As I have previously said, I don't like the the Governor's rhetoric around a "hidden tax," he tends to blame the victim: the uninsured person who typically is not offered coverage on the job, is not eligible for public programs, and who finds that buying coverage as an individual is either unaffordable or even unavailable, because of "pre-existing conditions." This rhetoric has consequences: if the problem is that people are uninsured, rather than the barriers that lead them to be uninsured, it's no wonder that Schwarzenegger and New America Foundation both see the "individual mandate" as a solution--something we disagree with.

But it is important to acknowledge that our current fragmented health system comes with a cost, to all of us. One of the problems is the lack of fair and equitable financing, with most employers providing coverage to all their workers, but many that don't.

We all pay more when Wal-Mart and McDonald's pay less. It's the same health care system, of doctors and hospitals, and if some manage to not pay their fair share into the system, we all pick up the burden. (Let's remember, the uninsured get it worst, getting charged more than others and facing collections and bankruptcy. But there are costs that are borne in the overall system.)

In some states, they actually have an explicit fee on insurance to help fund the safety-net hospitals and providers that care for the uninsured. So employers and purchasers are able to directly see, on their bill, how much they are paying for a broken health system that leaves people uninsured.

The New America Foundation, in its analysis defending its work, actually pointed out Hoover didn't question the notion of a "hidden tax," just its size. And the New America Foundation makes a credible case that it is bigger than what Hoover estimates.

The thing that rankled me most about the Walters column was the notion that reducing the "hidden tax" was "the most appealing premise" of health care reform. Let's put aside the millions of uninsured who would get coverage, and no longer live sicker, die younger, and be one emergency away from financial ruin. Let's put aside the community, economic, and public health benefits.

It seems to me that there are other reasons why an *insured* person would want a change in our health system:

* SECURITY: Even insured people recognize that they are one job change, one divorce, or other life event, from being uninsured. Reforms could provide more security that they keep the coverage they have now (through an employer or a universal system), are more likely to have coverage at their next job, are more likely to have a safety net if they fall upon hard time, and are more likely to have coverage even if they get sick.

* AFFORDABILITY: Aside from efforts to simply shift the burden of costs onto consumers, most of the ideas to contain costs in the health care system work better when more people are in the system. Whether its information technology, or prevention, or bulk purchasing, or better planning (not to mention fair financing), the cost savings work best in a universal system, rather than our current a fragmented system where it is hard to implement these efforts. For those who are insured, we can best slow the growth in health care costs better if we deal with the uninsured issue as well.

There's no disagreement that there's a cost to the status quo. But let's recognize the other benefits of reform as well.

Labels: Affordability, CostContainment, Employers, IndividualMandate, InTheNews, Research, Sacramento, Schwarzenegger, YearOfReform

posted by Anthony Wright | Permalink | 3:56 PM


 

$950 million is real money...

Monday, May 28, 2007

No sooner do we try to tease out the profit motives of BlueCross in opposing new rules and oversight, than we find that the stakes are even higher than we think.

Lisa Girion at the LA Times has the scoop:


State regulators are investigating whether a $950-million dividend Blue Cross of California sent to its Indianapolis-based parent violates an agreement the companies made to limit such payments to keep premiums down and maintain the quality of healthcare benefits, officials said Friday.

Officials said the parent, healthcare giant WellPoint Inc., should have taken no more than $141 million out of California. They called the higher amount excessive, particularly as Blue Cross, which serves more than 7 million state residents, has continued to raise premiums. The state Department of Managed Health Care also is considering expanding its probe to determine whether there are any other potential violations of the three-year agreement, part of a deal to win the agency's approval for a corporate marriage that created the nation's largest health benefits provider.

Cindy Ehnes, director of the Department of Managed Health Care, said she was shocked to learn of the $950-million payday for WellPoint, whose total profit last year was $3.1 billion on $57 billion in revenue.


The merger of Wellpoint and Anthem in 2004, creating the nation's largest health insurer, was controversial, for everything from massive executive payouts, to the question of whether it would truly help patients, not just profits. Then-Insurance Commissioner Garamendi extracted a series of "undertakings," or conditions that the new insurer would have to agree to, in order for the merger to be deemed in the public interest and approved.

The question is whether California BlueCross ratepayers are paying inflated premiums to finance the business expenses and profits of the parent company, Wellpoint.

Normally, the state doesn't look at such information. But the Department of Insurance (and the Department of Managed Health Care) used the merger as a leverage point to place some oversight over BlueCross' behavior. But that authority to keep BlueCross in check has a three-year expiration date.

Let's see how the regulator use this authority. Let's make sure that health reform includes additional oversight over insurers that won't expire.

The undertakings are here. Here's Blue Cross' 2005 report on its compliance with the undertakings.

Labels: BlueCross, CostContainment, Insurers, InTheNews, YearOfReform

posted by Anthony Wright | Permalink | 2:12 PM


 

Not suprised....

Wednesday, May 16, 2007

We already knew that the U.S. ranks 21st in life expectancy and 23rd in infant mortality, in spite of spending more than any other industrialized nation on health care, according to OECD stats.

The Commonwealth Fund yesterday just released a report reaffirming that notion.

It's not a surprising revelation for those of us working in health care, but hopefully, it will provide a jolt to those who insist that America has the best health care in the world.

That's not to say the other systems (in Australia, Canada, Germany, NZ and the UK) are perfect -- but they spend about half as much money -- per person -- being imperfect than we do.

Key findings of the report are that the U.S.:

• Is the most inefficient -- costing the most while providing the least.
• Is the most inequitable, leaving low- and middle-income citizens with no health coverage.
• Does poorly on chronic disease management.
• Is behind in adopting information technology to help manage chronic illnesses and see exactly what other treatments any given patient is on before prescribing care.
• Has horrible access because it lacks universal healht coverage.

The only measure that the U.S. does well on is preventive care. But, really, what good is preventive care (discovering you have diabetes) when you can't get your chronic disease managed?

Hopefully, such a report will help convince proud Americans who are convinced that we have the best health care in the world, that while America is great on many things -- it's not really on health care.

Labels: CostContainment, International, Research

posted by Hanh Kim Quach | Permalink | 2:28 PM


 

We hate to gloat, but...

Wednesday, May 09, 2007

Health Access' Legislative Advocate, Beth Capell, is beaming.

She's right -- again -- and she's got a Wall Street Journal article, (subscription required) quoting big businesses and insurers such as Marriott International and Aetna, to prove it.

Her unlikely new allies are singing the praises of LOWERING co-pays to cut costs, rather than INCREASING them, as the trend has been the past decade.

"Behind the about-face (on co-pays) is mounting evidence that higher
copayments may not make long-term economic sense. While hey've curbed drug
spending in the short run, studies show they've also discouraged people from
taking essential medicines."

As a result, some employers -- such as Marriott and Proctor & Gamble -- and health plans, mainly Aetna, are reducing or eliminating co-pays for patients with chronic diseases -- such as diabetes, and heart disease.

Since eliminating co-pays on asthma drugs, Pitney Bowes, the giant mail managing company, reports spending 19% less ANNUALLY for EACH asthma patient compared with six years ago.

Mariott reports that the expense of waiving and halving copays is more than paid for by their newfound savings.

"Over the next several years, we think we'll see even better results,'' said
JIll Berger, Marriott's vice president of health and welfare.

Now, Marriott's going *nuts* -- waiving copays all over the place -- on childhood immunizations, mammograms and colonoscopies, the Journal reports.

I'm glad these businesses are "discovering'' the wisdom of this tactic, and frankly, am a little miffed about why others aren't following. It's kind of like getting the oil changed in your car, you do a little regular and preventive maintenance on the front end to avoid something really bad, expensive and hard to explain on the back end.

Hopefully, these new allies can help prosletize on this front, since many of their colleagues have declined to hear it from the experts.

Labels: Affordability, CostContainment, InTheNews

posted by Hanh Kim Quach | Permalink | 10:49 AM


 

A senior moment...

Friday, May 04, 2007

I've been on the road speaking a lot. Yesterday, I presented on the health reform debate to a conference on Healthy Aging.

My message to them, not shockingly: seniors need to be engaged in this health reform and coverage expansion discussion. In part, I wanted to blow up the myth that seniors and their concerns aren't relevant because they largely have coverage through Medicare and Medi-Cal.

1) In fact, it is because they do have such coverage that they need to pay attention. Every time there is a recession or a deficit, we face calls to cut these programs. As health and consumer advocates, we argue that the increases in these programs are actually less than the overall private market, which leads us to conclude: We don't have a Medicare problem, We don't have a Medicaid problem, we have a health care problem.

And unless we fix the overall health care system problems, cutting Medicare or Medi-Cal isn't going to help. At the same time, Medicare and Medi-Cal will also be targeted for cuts until we get a handle on the overall system.

2) Medicare is a model, for those of us who support a universal, single-payer plan (like SB840), and related plans. Senator Kennedy and Representative Dingell just introduced a "Medicare for All" bill last week, allowing people to buy-in to Medicare. Professor Jacob Hacker calls his proposal "Medicare for Many." Introducing younger, healthier populations into Medicare, which right now is by definition older and sicker, could actually help the long-term financial picture for the program.

3) Many seniors rely on Medi-Cal, which could in store for major improvements. On the table are major Medi-Cal rate increases, which could increase access to care for many seniors, children, and people with disabilities. This also includes Medi-Cal expansions, not just for children but for low-income parents and adults without children at home: that's a big hole in our current system now, one that a lot who are in the 50-65 year old range fall through.

4) Speaking of the 50-65 year olds, they have perhaps the most to gain from comprehensive health reforms. Many are in the types of jobs that don't provide health coverage, and would benefit from an expansion of employer-based health coverage. Early retirees and others often find it impossible to buy coverage as an individual, either because it is unaffordable or unavailable, because of "pre-existing conditions" that virtually anybody who has lived sevreal decade has. Reforms on the table include prohibitions for insurers to deny or discriminate against consumers because of their health status.

5) Seniors are the biggest users of health care. Any effort to change or improve health care will naturally have a disproportionate impact on those who interact with the system the most.

6) Everybody has an intergenerational stake. Seniors also care about their own care, but that of their children and grandchildren. They want their family to have the social compact they had, where if they worked and paid taxes, they would have the security of health coverage. But they recognize that wihout action, that compact is unravelling.

Seniors can be an important voting block and political constituency, and so the success of reform, both in terms of if something gets passed and what gets passed, could hinge on the senior community.

Labels: Budget, CostContainment, MediCal, Medicare, SB840, YearOfReform

posted by Anthony Wright | Permalink | 7:14 AM


 

How to control costs, and more...

Thursday, April 26, 2007

Some laughter at an unexpected part of the conversation at the hearing yesterday... Senator Perata was detailing the various measures in his bill intended to control costs. For example, he stated that "we are in the freaking stone age in terms of medical records," and said that we "are killing people" by not using modern electronic technology to deal with medical records.

Beyond his own bill, he went on a short rant about prescription drug advertising, and the large amount of money spent on the television commercials for "the little blue pill," and the impact it has on health costs in general. He was very skeptical that as a patient he should be asking his doctor about any medication beyond aspirin. "What the heck do I know?" he inquired, wondering why he should be pestering his doctor about drugs, rather than the other way around.

He said if one looks at the sports show, all the advertisements are for "beer, cars, and pills--and not in that order." With a bemused smile, we commented on all TV commercials "and all those smiling men."

Not finished, he even interjected "you don't see the women smiling, only the men."

And then the conversation went back to health reform.

On a more serious note, one way to deal with the issue of prescription drug advertising is at the federal level, in a bill by California Congressman Henry Waxman, as described in this blog post by Steve Blackledge of CALPIRG. Not so seriously, he managed to invoke a comparison to Steve Martin in The Jerk.

Labels: CostContainment, Drugs, Federal, Funny, Legislation, OtherBlogs, Perata, YearOfReform

posted by Anthony Wright | Permalink | 1:20 AM


 

Deficit Reduction Act? Yeah Right.

 

Wonkery for your weekend...

 

Squeezing the Middle Class S'more

 

Profits over People

 

Veepy views on health care

 

Legislative Year in Review...

 

Sign or Veto? We'll see...

 

The Golden Gateway to health reform...

 

Like Michael Phelps. Except not.

 

As the dust settles...