Medical costs are going up; we have to cut our insurance
Some catching up on health care reform progress makes sense as we keep in mind these posts from Beat the Press Dean Baker writes:
Second, the story of massive huge future budget deficits has little to do with aging. It is a story of a broken private health care system. If the United States paid the same amount per person for health care as any other wealthy country we would be looking at huge budget surpluses, not deficits. Of course we can’t lower our costs because of the enormous power of the health care industry.
The big deal in national planning and in recent MA statements by planners, Gov. Patrick, and others is the ‘global payment method’ (of which there are many proposals of programs) to replace fee for service billing. Somehow a global payment system determined by a standard treatment sequence will cut an estimated amount of duplication and excess testing among a list of things. Estimates range from 4% to 14% ‘savings’ through a mechanism jointly approved by the Blue Cross insurers and hospital association is to accomplish this in MA, but no proposals are very concrete from my survey of MA articles. Michael Halasy will hopefully write more on this topic from the inside.
Pay for Performance Summit will happen in March where the many proposals of ‘global payments’ will be discussed among many items.
Lifted from comments on an Angry Bear post:
…the little observed fact that cutting Medicare will not cut your medical costs…just put you in the private market. It seems a little stupid to be running around saying “medical costs are going up; we have to cut our insurance.”
No one is using this model? Vermont will be worth watching.
“Pay for performance” is like playing quarterback in the NFL.
Easy to discuss, but really hard to execute.
Somewhere I probably have my notes from a seminar in 1993 on PfP. Still trying…..
These are possible solutions the problem? Surley you jest?
rusty:
Almost like negotiating prices for treatment with a doctor working for the U of M healthcare system. They do not know what the prices are. Perhaps, a better way to say it is geting the best value for the dollar in most cases
I dunno, but I feel like American arrogance might be part of our problem. Our health care costs as a percentage of GDP started pulling away from the rest of the developed world around 1980. Do you think that we might be doing something wrong, and they are doing things better than we are? We seem to think that we have the best health care system in the world, and our only problems are controlling the costs of Medicare and Medicaid, and the question of who is covered by insurance and who pays. You know, maybe we can learn something from people who have solved or avoided our problems. What do you think?
We pay our doctors too much: more than their international peers, and more than other professions. The comparision between doctor and scientist is pretty telling. Most fresh-out-of-postdoc PhDs would be happy to make $80,000 pear year. A nurse anesthetist, after only spending four years in med school in residency (vs 7 for PhD+postdoc) earns about $120,000 fresh out the door, with insurance covered by the hospital. Oh, and the loans, you whine? How much income does it take to cover $150,000 in loans? Well, such a loan amortized over a career might be $1000 per month, so probably around $20,000 per year, pre-tax. So the NA is making 25% more than the scientist after all is said and done, and gets three extra years of non-poverty to boot. And better job security. And the ability to work pretty much wherever he or she chooses, rather than wherever someone happens to be hiring a scientist with a particular speciality. The same is pretty much true of any type of doctor, dentist, or pharmacist than you can think of.
Chad:
You once gain venture into the ludicrous and incredulous, doctor salary is not the prime problem with healthcare costs.
Chad:
You once again venture into the ludicrous and incredulous, doctor salary is not the prime problem with healthcare costs. Read a little of Maggie Mahar and you may catch up soon.
“Capitation’ was the buzz awhile ago….worked better in states like MA with strong regulation and mostly non-profits and not so well in highly for profit environments. Michael said he prefers the Prometheus proposal.
Well, people in MA have thought about the issue since 2007 as the Romney legislation simply sidestepped the issue…this appears to be the latest round between the power players nationally as well. I don’t understand how it will cut costs by some sort of ‘efficiency’ from not duplicating services and such, but also what is best practice and who says so seems crucial.
“Capitation” from the 90’s meant no overnite stay in the hospital for a newborn and mom the day of birth as the extreme, which did cause a backlash against the bean counters whoever they are.
run,
doctor salary is not the prime problem with healthcare costs
There is no “prime” problem with healthcare costs. But there are lots of components to high health care costs. Chad has a point, doctors make a lot of money because the AMA limits their supply. There are a lot more people that want to become a doctor, and are capable of being a doctor, than are allowed to be a doctor. Artificial supply constraints drive up the price of doctors.
Sammy sounds like Dean Baker?? Omg the world is topsy. Actually, I did read something lately on common ground…but it is slippery to capture.
Rusty had a piece on gender, fewer hours for the younger generation (less than 80/wk I believe), and thus the need for more doctors as well.
It needed fleshing out.
SHMO rationed care?
The “accountable care organization” (ACO) approach under discussion would appear to force patients into larger socialized medical care programs managed at State level whereby tighter rationed medical support would or would not be provided based on predetermined doctor, doctor groups, and hospital patient financial budgets established by the State. This is one step above the rationed support that HMOs and other healthcare insurance companies attempt to enforce now. Of course, the shift from fee for services to predetermined budget limits is the SMHO measure of success by which hospitals, doctors groups, and doctors will be rewarded at year’s end.
The State government will be the patient’s Super HMO or State HMO (SHMO)and the patient won’t be routinely talking to State medical health insurance representatives when whatever service is denied or questioned. No, the patient will referred back to his/her primary care physican who will have to explain the denial, probably for the third time. If the patient steps out of the SHMO system and raises his/her concerns with the USHMO (U.S. Government HMO), the patient will probably be advised that the problem is at State level, and back to the SHMO the patient will go. Then back to the primary care physican. Pity the physicans on this one.
There should be a measure of success with the ACO approach if the program is built around patient care provided by primary care physicians. That is one of the promotion claims, but most patient care today is built around primary care physicians. Apparently, the medical cost savings will accrue above that level of patient care and referral unless the primary care physicans are also bound by a SHMO approved medical budget administered by an ACO.
I share the concerns of Mass. State Inspector General Gregory Sullivan who stated what is “missing from the current discussion is the enforcement mechanism that’s going to control the increasing premium rates that people pay insurance companies” for global payment plans. What’s up with that? How did the planners overlook the patient’s healthcare insurance premium costs?
A patient would be well advised to find out how much he or she is worth in the medical world of SHMO rationed medical care. Ask to see the ACO budget line entry.
When are the doctors, doctors groups, and hospitals provided with their budget outlays under this scheme? On the front end, quarterly, or at the end of the budget year?
Statements from the main post articles:
If some sort of national health care reform emerges from its current state of limbo and actually becomes law, it could include provisions seeking to move away from the fee-for-service reimbursement model. One of the possible alternatives is a “global payment system,” which proponents say would reward physicians for quality and care coordination, reduce overutilization, and tie compensation to outcomes rather than the volume of services provided.
Massachusetts is encouraging physicians and other care providers to form “accountable care organizations” to help make a global payment system work. Portrayed as the next evolutionary step beyond HMOs, ACOs are a key component of the global payment system model, which itself is sometimes referred to as the next step beyond capitation and managed care.
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In an accountable care organization, primary care physicians are the bedrock of a larger network of care providers, ensuring patients receive exactly the care they need, when they need it, in the most appropriate setting. That’s how we get great patient outcomes and save health care dollars at the same time.
The best outcomes for patients are not achieved through typical episodic, complaint-based, illness-oriented care, which is the hallmark of our current system. Instead, they’re achieved through a robust system of primary and preventive care, state-of-the-art chronic disease management and patient care coordination throughout the health care system.
Community Care of North Carolina, for example, improved care for more than 725,000 patients and saved taxpayers more than $231 million in two years by providing patient centered medical homes for Medicaid beneficiaries. Geisinger Health System in Pennsylvania improved care for 2.5 million patients, realized a 20% reduction in hospitalizations and saw a 7% savings in total medical costs after implementing the medical home model.
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If the goal is to build a health care system effectively organized around meeting and respecting the needs of the patient and family (nothing more or less), it can’t be built on a reimbursement system that pays for volumes of “piecework” delivered in silos.
The aim cannot just be about payment reform either; it has to integrate and improve the experience of care for patients and the health of the population, while reducing per capita costs.
Massachusetts has taken a strong stance in favor of payment reform and specifically for global payments.
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The idea of paying large and varied groups of doctors and hospitals a set amount for the care of all their patients, as Massachusetts is considering, is alluring for the whole U.S. medical system, including California. In its ideal form, patients would have a primary doctor who followed them closely, working to keep them well, yet with swift access to good specialists when needed. Costly, unnecessary and sometimes dangerous over-treatment, often aimed at boosting medical income, would be curbed. Communication with patients, and among their doctors, would greatly improve — removing one of the biggest frustrations of current major medical care. Doctors would get financial rewards based on the well-being of patients, not the number of tests and procedures performed. Health care costs would come down for everyone from individuals to governments.
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Bob Oakes: Under the governor’s bill, doctors and hospitals would no longer be paid for each individual service they provide. Instead, they would have a yearly budget for the care of their patients. How would this save money?
Martha Bebinger: Right now, if a patient has asthma or diabetes, […]
If pay for professionals is half the cost of your medical care (a reasonable guess) and w are over-paying them by 25%, fixing this issue cuts our costs by 12.5%. Since we need to find about a 33% cut in order to get to international spending norms, I’ve just pointed out more than a third of a problem.
Sammy is right. The number of doctors etc are gated by the AMA. Only about 40% of those who apply to med school ever get into one. There is no lack of supply outside of that which is artifically created.
De
I do not debate health delivery.
Too much like privatized, non competition/market, for profit arsenals, profit motive has no effect in disbursing resources where the government provides most of the cash.
Like the military industrial complex, the more money thrown in the less return.
But someone is making big profits.
Death panels or phony market (as if something invisible keeps eroding the marginal revenue product of inputs) arguments?
One place that a lot of money is made is durable medical equipment. Take the scooter example medicare buys the scooter (part B) not leases it. Or take oxygen equipment. The lease here would buy the machine over the internet in 3-4 months (My mother needed such equipment in her last year, I was wandering the web and found places selling the same machine for that price difference). Every so often they try to put this stuff up for bids but since every district has a medical supply store they persuade their congressperson to fight the concept because it would cost the supply stores money.
I have worked with and supervisored “gas passers” (MD and CRNA) and there is not enough money on the planet to get me to do that job – STRESS!!!!
The feds could straighten up the DME market (via Medicare) but prefer to be stupid – for decades.
I’ve been on the phone or email every day for the past three weeks talking about ACOs, bundled payments and etc. (and that includes some national level folks a whole lot smarter than me).
Obama wants ACOs, but no one has really defined what it is or how it will worrk. Lots of people thinking about it, but still very fuzzy.
My angle is how do providers prepare and participate, and so far my answer is ?????
“Ultimately, abuse for profit ruined the promise of capitation.”
I initially misread the last word as, “capitalism.” My reaction was, “Yeah, sounds about right.”
rust,
Have you talked to anyone at Community Care of North Carolina or Geisinger Health System in Pennsylvania ? Both appear to moving in the direction of creating ACOs of a sort.
I would like to know how the budget levels are to be determined and when the payments will be forwarded to the medical providers.
rust,
Have you talked to anyone at Community Care of North Carolina or Geisinger Health System in Pennsylvania? Both appear to moving in the direction of creating ACOs of a sort.
I would like to know how the budget levels are to be determined and when the budget allocation payments will be forwarded to the medical providers.
Dean doesn’t include a complete list of steps that need to occur to get to any substantial savings.
One, doctor tort differences between countries are not negligible.. most of the over-testing is for CYA purposes, to rule out the diagnoses that happens in 0.1% of cases. Reduce the legal liability for doctors and much of this testing has a chance to decrease.
Two, if you want health care costs to come down, force insurance companies to actually pay out on legit claims. One of the main reasons why insurance companies have such high profit margins is that they pay about 30-35% of claims they approve. So your ED bill is 10/3 the actual cost to cover the fact that the hospital will only receive payment for 30% of their services.
Three, if you want health care costs to come down then we need to have an adult conversation about what services we don’t need as a country. Do you want EMTALA (the right every person has to walk into an ED and be treated) to be revoked? Do you want to eliminate the ability of anyone to access care today rather than next month – because the network of doctors, specialists, hospitals, urgent care clinics etc is unique to the US, and costs money to maintain.
Bottom line: There is no silver bullet for any fundamental savings, despite what Dean claims. If there was, lean/six sigma teams would have implemented these changes long ago.
Actually the congress critters are paid off by the local dme dealers. Since every congressional district has several of these, they lean on the congresscritter to do their bidding. Its just another case of business capture of government.
Chad
while i agree that doctors are probably overpaid because of artificial constraints on the supply, i think your formulation is a bit naive. the life of a real scientist is a bit cushy compared to the life of a doctor. a real scientist would work for food.
a scientist doesn’t mind going to work on his bicycle and washing his own dishes. a doctor might feel that the demands on his time and concentration justify enough pay to be able to afford some help.
Unsympathetic
most people have their minds made up and will not change them if Jesus himself were to explain it to him.
there have been studies that show that some “areas” have three times the costs per patient on average than others. the difference seems to be due to the prevailing local attitude about whether medicine is a business or a calling.
Unsympathetic
most people have their minds made up and will not change them if Jesus himself were to explain it to them.
there have been studies that show that some “areas” have three times the costs per patient on average than others. the difference seems to be due to the prevailing local attitude about whether medicine is a business or a calling.
Maybe run can send us a note on the lean/six sigma angle?
Unsympathetic: you have a point about a serious conversation, but I fail to see how that can be accomplished currently. Tort reform results in say Texas have been compared to other states at AB…use search, it is from last week I believe.
If your using the quote, I can’t find where Dean says there is a silver bullet….he is saying demographics is not the silver slogan being bandied about to blame our elders for the problem.
We do, however, have to pay our bills for things we want. And evaluate the costs.
Almost everybody is moving in that direction, except that we don’t know exactly what that direction is.
We do know a few things – more sophisticated management, more IT support, lots of data, more integration – but we really don’t know how to fit the pieces together.
The parents are likely to be large hospital systems (in most areas) there is some consensus on that. Some large doc groups may take a run at this, but is very iffy.
Chad:
No, it is a stupid guess on your part and you keep displaying your ignorance on Angry Bear in a number of different areas. Sammy does not know what he is talkin about and is here for reasons other than a reasonable diaglogue . . . Sammy, CoRev and MG are here to disrupt.
But since you asked . . . “Today I’d like to focus on physicians. Looking back to 1960, it turns out that the share of the health care pie that we spend on doctors’ fees and clinical services has grown slightly—from 19.4 percent to about 22 percent. ” http://www.robertstoweengland.com/dmdocuments/RoleofPhysText.pdf Even at that, primary care doctors saw far less of the increase than specialists
run75441,
You’re a liar. Just more of your usual personal attacks on individuals who have participated on Dan’s blog a helluva lot longer than you.
Dan didn’t set out to turn AB’s original blog into a lightweight glee club. Dan welcomes participation from all persons offering different perspectives and civil opinions who have an interest in sharing viewpoints with others. All Dan asks is that participants attempt to stay on subject instead of engaging in non-related discussions and ignorant hillbilly personal attacks. You are among the handful of immature old blowhards who try to wreck thead discussions with personal attacks and other putdown nonsense.
Moreover, Chad never asked you a question. In light of your foolish arrogance, it’s unlikely that any new participant would bother to ask you anything.
run75441 – “Chad: No, it is a stupid guess on your part and you keep displaying your ignorance on Angry Bear in a number of different areas. Sammy does not know what he is talkin about and is here for reasons other than a reasonable diaglogue . . . Sammy, CoRev and MG are here to disrupt.”
You’re a liar. Just more of your usual personal attacks on individuals who have participated on Dan’s blog a helluva lot longer than you. You’re an arrogant old fool.
Dan didn’t set out to turn AB’s original blog into a lightweight glee club. Dan welcomes participation from all persons offering different perspectives and civil opinions who have an interest in sharing viewpoints with others. All Dan asks is that participants attempt to stay on subject instead of engaging in non-related discussions and ignorant hillbilly personal attacks. You are among the handful of immature old blowhards who try to wreck thead discussions with personal attacks and other putdown nonsense.
Moreover, Chad never asked you a question. In light of your foolish arrogance, it’s unlikely that any new participant would bother to ask you anything. It would be a wasted effort in light of your snotty conduct with Chad and others on Dan’s blog.
run75441 – “Chad: No, it is a stupid guess on your part and you keep displaying your ignorance on Angry Bear in a number of different areas. Sammy does not know what he is talkin about and is here for reasons other than a reasonable diaglogue . . . Sammy, CoRev and MG are here to disrupt.”
You’re a liar. Just more of your usual personal attacks on individuals who have participated on Dan’s blog a helluva lot longer than you. You’re an arrogant old fool.
Dan didn’t set out to turn AB’s original blog into a lightweight glee club. Dan welcomes participation from all persons offering different perspectives and civil opinions who have an interest in sharing viewpoints with others. All Dan asks is that participants attempt to stay on subject instead of engaging in non-related discussions and ignorant hillbilly personal attacks. You are among the handful of immature old blowhards who try to wreck thead discussions with personal attacks and other putdown nonsense.
Moreover, Chad never asked you a question. In light of your foolish arrogance, it’s unlikely that any new participant would bother to ask you anything. It would be a wasted effort in light of your repeated snotty conduct with Chad and others on Dan’s blog.
OT:
run75441 – “Chad: No, it is a stupid guess on your part and you keep displaying your ignorance on Angry Bear in a number of different areas. Sammy does not know what he is talkin about and is here for reasons other than a reasonable diaglogue . . . Sammy, CoRev and MG are here to disrupt.”
You’re a liar. Just more of your usual personal attacks on individuals who have participated on Dan’s blog a helluva lot longer than you. You’re an arrogant old fool.
Dan didn’t set out to turn AB’s original blog into a lightweight glee club. Dan welcomes participation from all persons offering different perspectives and civil opinions who have an interest in sharing viewpoints with others. All Dan asks is that participants attempt to stay on subject instead of engaging in non-related discussions and ignorant hillbilly personal attacks. You are among the handful of immature old blowhards who try to wreck thead discussions with personal attacks and other putdown nonsense.
Moreover, Chad never asked you a question. In light of your foolish arrogance, it’s unlikely that any new participant would bother to ask you anything. It would be a wasted effort in light of your repeated snotty conduct with Chad and others on Dan’s blog.
MG:
Another AB bad ass who would not engage in such tactics face to face. You are a light weight MG and a copy and paste maestro. Have you ever written anything of your own translation. an original perhaps? I and others have yet to see it. Even on this thread what you have written other that this polemic is a C & P. Entertain us some time MG with your literary skills, if you have any. Bruce had you pegged correctly.
It is not Dan’s blog, it is Angry Bear’s blog with Dan as the moderator. You have conflated and construed the meaning of his intent and politeness to you. It is interesting that you post these particular citations without giving a hint of where you have copied them. Or is such a citation to be hidden from us MG?
MG:
Another AB bad boy who would not engage in such tactics face to face. You are a light weight MG and a copy and paste maestro. Have you ever written anything of your own translation. an original perhaps? I and others have yet to see it. Even on this thread what you have written other that this polemic appears to be a C & P. Entertain us some time MG with your literary skills, if you have any. Bruce had you pegged correctly.
It is not Dan’s blog, it is Angry Bear’s blog with Dan as the moderator. You have conflated and construed the meaning of his intent and his politeness to you. It is interesting that you post these particular citations without giving a hint of where you have copied them. Or is such a citation to be hidden from us MG?
run,
Something that is 22% of cost, and increasing, is irrelavent to a discussion of costs?
What do you want everybody here to do? Agree with every point you make, no questions asked? Are you really that omniscient?
You’re very full of yourself.
run,
Something that is 22% of cost, and increasing, is irrelavent to a discussion of costs?
What do you want everybody here to do? Agree with every point you make, no questions asked? Are you really that omniscient?
You’re very full of yourself.
run,
Something that is 22% of costs, and increasing, is irrelavent to a discussion of cost?
What do you want everybody here to do? Agree with every point you make, no questions asked? Are you really that omniscient?
You’re very full of yourself.
BTW, it is Dan’s blog.
Sammy:
Oh really?
“If pay for professionals is half the cost ,” well it isn’t 50% of the cost and neither is it 25% of the cost. It is 22% of the cost of rising healthcare costs where big pharma, medical device manufacturers, and procedures lead the way and are an ever increasing cost of healthcare and are leading the way. They are in the business of slling service Sammy, not healthcare, nor primary healthcare, not preventative healthcare . . . the medical healthcare industry is here to make a profit (period). They have little concern over your health.
Learn the issues Sammy and understand what they consist of if you wish to present an argument to me.
Run,
“If pay for professionals is half the cost ,”
Chad was talking about all professional salaries. He also referenced nurses. Your link just references physician salaries.
You need to read more carefully before you attack. Don’t assume everybody that has an alternative view from yours is an idiot. That is another sign of an excessive ego.
Hmmmm….no, the original Angry Bear handed over the keys to me about 3.5 years ago. Angry Bear blog is run with little editorial input on my part in particular for main posters, but I do choose who is a Bear in consultation with the team. So I think it is safe to say it is mine in that sense…moderation is a more noxious part of the job sometimes, like now. But this is the way things are run and yet I have final say as well. Mostly I support topics and references for us all, and network with other bloggers and institutions.
It used to be that I could change parts of statements and note such, or cross them out, but amending comments has been dropped by js kit so I can only approve or delete. I find this interchange beyond an accceptable range…not the entirety, but poison comes in small doses.
I have no problem with strong statements, but information and corrections come with explanation. Ease up folks. I will e-mail participants.
Rdan,
Just as a add to this discussion. People are saying doctors cost too much. I have two questions;
1) Considering the cost of a medical education and the years of time, how do you plan to pay these people back for that? This isn’t a PhD in 16th Century English Literature. We actually need doctors and right now it costs a fortune for someone to become one.
2) Exactly how do you propose to force a doctor to take lower pay? In high cost of living areas you won’t find the best doctors taking Medicare/Medicaid/Tricare patients. In the DFW area none of the docs on the latest ’10 best doctors’ lists take any of the above. None. So how do you plan to force people to work on your medical plantation?
Yea a bit over the top, but when I see the left start talking about limiting lawyers pay, then I’ll take them seriously about doctors.
Islam will change