Saturday, June 25, 2011

Mass AG: Time to regulate Provider Pricing

I think provider pricing regulation is both inevitable and necessary to controlling growth in health care costs.  Step by step, Massachusetts is reaching the same conclusion.  Per Incidental Economist, here is state Attorney General putting the idea out in the annual cost analysis (emphasis mine):

The competitive benefits of tiered or limited network products, however, are unlikely to counteract, on their own, the historic price disparities that threaten many health care providers. During this time of market transition, we recommend temporary statutory restrictions on how much prices may vary for comparable services. Statutory restrictions should only be used as a stop-gap to the extent necessary to moderate price distortions until the corrective effects of tiered and limited network products can improve market function. We are not recommending a return to rate setting for hospitals and physician groups. Instead, we recommend a competitive market-based approach balanced with limited government intervention to foster effective market function.

The AG can call it what she likes, she’s not fooling anyone.  Whether it’s single payer like Vermont or mandate based private insurance like Mass, all roads lead to regulating provider pricing.  All roads, that is, that work.

Saturday, June 18, 2011

What I’m listening to

The podcast interview of Peter Godwin, on Robert Mugabe’s efforts to hold power.  Interesting enough that I’d put him on my reading list.

Sunday, June 12, 2011

Followup on Massachusetts

Via Incidental Economist.  The difference in substance between the discussions there and here in Oregon is striking. 

Worth chewing on:  Annual public hearings on health care costs, as opposed to holding hearings on individual insurer filings in isolation.  Compare and contrast…

Saturday, June 11, 2011

Another dark corner of health care… Residency

Passages that make you wonder about the people taking 17% of GDP:

I could spend days telling you tales of horror, but one quick instance springs to mind. I had a bad two months at a county hospital because many of the physicians who worked there demanded that I do things that I felt were not only bad ideas, but also borderline unethical. I refused, and also refused to keep my mouth shut about it. When the end of the rotation came around, I sat with the physician who was to evaluate me. He told me I was going to get a crappy evaluation. He asked me why I couldn’t just keep my head down and conform. This guy had literally made a career out of “sticking it to the man”, and was known as an iconoclast; the irony was lost on him. He ended by telling me he felt compelled to try and sabotage my fellowship application. He said this with a straight face.

Even today, ten years later, I shake with anger as I write this.

This kind of thing happened every day. Physicians don’t talk about it, but we all have stories. The system covers up incompetence and punishes independence. We keep a hierarchical structure in place which continually reminds you that someone is on the bottom. And, more than anything else, we fight to defend this system against all encroachment. We all know, deep down inside, that having an underclass of physicians who will do all the crappy work, all night, all weekend, for relatively little money is the only way to hold it all together.

It’s rotten, it’s wrong, and I loathe it.

I’ve said before that doctors are people and subject to the same biases and failings as anyone else.  When we turn a blind eye to those failings and put them on a pedestal we shouldn’t be surprised that abusive practices proliferate.  The residency system is one manifestation of such practice.  Can you think of any other service which systematically exploits recruits like this?  I can

Tuesday, June 7, 2011

Governments, Insurance and Unfunded Liabilities

There are a lot of things one can criticize about the private insurance market, but one thing you can’t say is that they have chronic issues with unfunded liabilities.  In contrast, you can barely find a story about government pensions or retiree benefits that doesn’t involve funding problems. 

Simply put, governments are really bad at managing current commitments to future obligations.  They habitually fail to put enough money aside to fund their promises.  I suspect a deep sociological root to this, that those with immediate needs or experiencing immediate suffering will always take precedence over future needs which can only be understood now in abstract.  Or it could be a cynical political calculation that tomorrow’s voters don’t vote in today’s elections.  Regardless, efforts to write insurance through government agencies warrant skepticism. 

Ask the question of your elected officials: are you willing to ignore current needs and suffering in order to save enough money to meet future obligations?  If not, you shouldn’t be in the insurance business.

Saturday, June 4, 2011

All Payer

I was surprised to see these guys advocating all-payer, I thought it had been tried in Maryland and wasn’t all that great.  Turns out I misunderstood what Maryland was doing.  Maryland does have an all payer system, in which all patients pay the same price regardless of insurance.  The ratemaking however is handled by the state, not the hospitals.  Presumably that leads to a less dynamic, static system without incentive to innovate.  That’s better then totally unregulated providers, but not as good as if they competed on service or price.

Key question:  Hospital pricing is regulated, but what about everything else?  Outpatient surgery?  Imaging?  A lot of money get spent in places that aren’t hospitals.