Cost

HEALTH REFORM: Four Goals for "Dysfunctional, Disorganized and Wasteful" System

November 24, 2009 - 1:20pm

Dr. Jack Wennberg, the father of the Dartmouth Atlas, and Shannon Brownlee, the author of  Overtreated and a New America colleague, recently posted on the Health Affairs blog, recapping four major goals for repairing  the "dysfunctional, disorganized, and wasteful delivery system."

1. Improve the science of health care delivery.

The stimulus package boosted comparative effectiveness research, and the health reform bills in Congress would build on that. But studying effectiveness of treatments, in isolation, isn't enough, they argue. We also need to develop a "science of health care delivery" which they call a "black box." Patients with similar conditions are treated in very different ways and we aren't doing the necessary research into how to best to allocate resources and deliver the most effective care.

 2. Foster the expansion of organized systems of care.

HEALTH REFORM: Polls Holding Steady Into Thanksgiving Break

November 24, 2009 - 1:10pm

The latest Kaiser Health Tracking Poll is in, and the health care reform approval numbers are holding pretty steady. Slightly more people than last month, 54 percent, believe the country will be better off if health reform passes. And 42 percent -- an improvement from earlier this year -- believe that health reform will personally benefit them or their families.

The number who believe health reform will hurt them (24 percent) or the country (27 percent) is down slightly from last month. Roughly the same one-in-four don't think health reform will affect them. Democrats and Independents are more likely than Republicans to view health reform as positive. However, when asked about specific provisions in the health care bills, a majority ranked as  "extremely" or "very" important these components of reform:  affordable, available health insurance, coverage for people with pre-existing conditions, providing subsidies to help the uninsured purchase coverage, requiring all Americans to have health insurance, filling the Medicare donut hole, and not adding to the U.S. budget deficit.

HEALTH REFORM: Dialysis Done Right

November 23, 2009 - 4:30pm

Medicare hasn't put the finishing touches on its new dialysis reimbursement policy quite yet (you have until December 16 to get your comments in) -- but has decided to invest in educating the public on various dialysis treatment options. It's part of a longer term effort to give patients more of a say in managing their chronic diseases, and in changing some of the inefficient ways Medicare pays for kidney care.

More than 350,000 Medicare patients with end stage renal disease undergo dialysis. Most patients undergo out-patient treatment three times per week at either an independent or hospital based facility -- in the United States, fewer than a tenth are treated at home. (Rita Rubin of USA Today notes that three treatments per week is the standard not necessarily because it is "optimal but because that's the way it has been done for nearly four decades.")

 

But Medicare's education campaign will help patients make more informed decisions about where and how often they are treated. 

HEALTH REFORM: The Cost of Doing Nothing... Part 984,039,825

November 20, 2009 - 4:49pm

As we have discussed several times, doing nothing is simply not an option. We need to reform our health care system -- not despite our economic crisis, but because of the significant impact health care has on U.S. workers and businesses.

In an article for the Washington Post this morning, Peter Orszag, Director of the Office of Management and Budget, stresses that "as we enter the homestretch, the greatest risk we run is not completing health reform and letting this chance to lay a new foundation for our economy and our country pass us by."

He states that if we do not do anything to slow the rising cost of health care, the federal government will end up spending more on Medicare and Medicaid than all other government programs combined. And our country could not afford to let that happen.

We have established that the cost of doing nothing is high, yet, as Orszag notes, some still have their reserves. These are the people wondering whether it is truly possible to achieve comprehensive health reform in a fiscally responsible and sustainable manner.  

But just in time for the Senate vote, Orszag takes the time to explain why in fact we do not need to fear the fiscal impact of health reform.

QUALITY: Dying Well Beats Dying Badly. And Expensively

November 20, 2009 - 9:01am

As we've written a lot on end of life care, we notice when others do the same.  NPR's Joseph Shapiro this week reported on La Crosse, WI where 96 percent of the adults who die have an advanced directive. That extraordinarily high figure arises from the innovations and commitment from Gundersen Lutheran hospital. Careful, sensitive discussions by trained doctors and nurses -- they use a 12 page guide -- is time consuming. Medicare doesn't reimburse them for that time, A provision in the House health care bill would change that -- the provision that was caricaturized as a "death panel." The Senate bill doesn't contain it.

WORLDVIEW: Assume There's Morality

November 19, 2009 - 4:16pm

Not many health writers -- not many writers of any ilk, for that matter -- can match T.R. Reid's ability to bring a light, witty touch to really serious topics. Like health policy around the globe.

Tom (that's what the "T" in "T.R." stands for) was the featured speaker at the Peterson Institute of International Economics today. Not the usual venue for the book tour for his best-seller, "Healing of America: A Global Quest for Better, Cheaper and Fairer Health Care." Before his talk, he told me he was planning to stress the moral case for covering everyone. Not the approach, perhaps, that this particular crowd was used to hearing. Go ahead, I told him. It is, after all, a roomful of economists eating a free lunch.

And that's what he did.

COVERAGE: Evaluating the Public Plan, Man

November 19, 2009 - 3:23pm

Slate's Timothy Noah provides a thoughtful overview of the intellectual origins and political evolution of the public option's place in health reform.

It's a complicated case, the public option. Lotta ins. Lotta outs. But Timothy Noah is the Big Lebowski of health writers, and is the man for the job to keep all these strands together. (Yes, we know we've made that joke before, but like our living room rug it really ties the blog together.)

Noah's goal was to understand why the CBO and others estimated that premiums for a so-called level playing field public option would cost more than private plans. Noah spoke with New America's Len Nichols, whose paper with John Bertko helped outline how a public option with negotiated payment rates could compete on a level playing field with private plans.

COST: The Price is Right for Health Reform

November 19, 2009 - 1:50pm

After weeks of anticipation and speculation, Senate Majority Leader Harry Reid has unveiled the legislation that will bring health reform to the Senate floor in the coming weeks.

While waiting for the details of the bill to come out Wednesday, we created a little office pool, called the Price is Right for Health Reform. In an office-wide email, we asked our peers to guess the CBO's estimates of the gross costs of the bill. Showcase Showdown rules (closest without going over) applied. We were intentionally vague in our question because estimating the true costs of the bill is inherently a difficult process.

The number we were looking for was $848 billion. The CBO's estimate of the gross cost of the bill is essentially the total cost of coverage provisions over the next 10-years. This is the number most frequently reported in the media as the "cost" of the various health reform bills being discussed. But is this really the best indicator of the true costs of health reform? Maybe not. First, timing matters: $848 billion over ten years is a lot different than a $787 stimulus bill where 90 percent of the money is spent within the first 3 years. So do deficits. How much does a bill cost if it's fully paid for and in fact reduces the deficit as is the case for both the House ($109 billion) and Senate ($130 billion) bills?

We received plenty of calls from our co-workers asking just these questions. We tried to stay quiet, because we were interested in what the educated, non-health policy wonks think about the cost of reform. True to our think tank's "post-partisan roots" we got a range of answers from "too little" to "$600 trillion, Obama lies." We got a couple of "$1" which we assume was a reference to the bill's deficit neutrality, and $90 billion which seems like a reasonable estimate of yearly costs.  But the majority of the answers clustered within the $800-$900 billion range, surprisingly close to the final answer. Few people seemed willing to go above $900 billion, suggesting the power of the official price tag President Obama put on reform during his September address to a Joint Session of Congress. So who won? The answer after this non-commercial break:

HEALTH REFORM: Highlights from the Senate Bill

November 19, 2009 - 11:04am

The latest version of Senate health care legislation (pdf available here) crafted by Majority Leader Harry Reid is making its rounds.  There is a lot to review, but an initial read shows the bill is close to the legislation approved by the Senate Finance Committee in early October with a few notable changes: more generous subsidies, a higher threshold for the excise tax on insurers who offer high-cost plans, an increase in the Medicare payroll tax for Americans making over $250,000, and the addition of a long-term care insurance program for people with disabilities.

While this legislation also delays the implementation of insurance market reforms and subsidies (when compared to the Senate Finance legislation) there are a number of provisions that would start helping Americans immediately. In particular, the legislation:  

COSTS: The Price of Pessimism -- What the CMS Actuaries Missed

November 17, 2009 - 4:24pm

Last week, Medicare's chief actuary (formally known as the Office of the Actuary, or OACT) released an analysis of the financial impact of the health reform legislation recently approved by the House of Representatives (H.R. 3962).  Here are a few thoughts:

Get familiar with the source.  Remember their history.  The Medicare and Medicaid actuarial team's job is to track and understand Medicare spending patterns.  By design, it is also their job -- and their historical pattern -- to be skeptical about proposals for change. Just for context, the office's estimate of the cost of the Medicare Modernization Act in 2003 (the bill that created the Medicare prescription drug program, Part D) was $100 billion, or 25 percent, more than the Congressional Budget Office's (and CBO is also conservative by nature and design).  Last year CMS's Chief Actuary testified to Congress that the 10-year cost of the Medicare drug benefit is 37 percent lower than originally projected in 2003, and 17 percent lower than the previous year's updated projections.   Don't get me wrong. We need conservative estimators to prevent Pollyanna policy from being enacted into law.  But we should take that conservatism for what it is: a useful check on the naturally optimistic expectations of reformers.

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