Posts Tagged The Washington Post

From The Washington Post: A $300 Billion Deception

I think the November 15 Editorial Page at The Washington Post has it exactly right. In the “if you can’t beat’em, join’em” category, I quote:

 HAVING PASSED a health reform bill that is, at least theoretically, paid for, the House of Representatives is poised this week to blow a quarter-trillion-dollar hole in the federal budget involving, you guessed it, health care. This is the so-called doc fix, to prevent scheduled cuts in Medicare reimbursements to physicians from taking effect.

Say you are a member of Congress who agrees that the cuts should be rescinded — that physician payments shouldn’t be reduced, that is — but also believes that the payments should not add to the national debt? Under the rule governing the House debate, you won’t be allowed to suggest any offsetting savings. Either you go for the doc fix and add massively to the deficit, or you torpedo the fix and wreak havoc in the Medicare program, with a 21 percent cut set to take effect Jan 1. Nice choice. It puts those who believe in both fiscal responsibility and averting these draconian cuts in an impossible situation.

By the way, don’t be fooled by the incredible shrinking “cost” of the fix. The official Congressional Budget Office estimate used to be $245 billion over 10 years. Now it’s $210 billion. In fact, the real hit to the budget will be closer to $300 billion. The lower CBO numbers stem primarily from the administration’s move to change the rules about which physician payments are subject to the cuts. The administration proposed a regulation to exempt drugs administered in doctor’s offices, such as chemotherapy, from the spending ceiling. That has the effect of making the cost of the fix look smaller, but it doesn’t change the ultimate drain on the treasury: Medicare will end up paying out the same amount of money.

All of this is, to some degree, Medicare kabuki to placate the American Medical Association. The Senate doesn’t have the votes to pass a permanent fix without paying for it — though, of course, it also doesn’t have the votes actually to pay for it. So while the House might pass the unpaid-for fix, it will likely die there. The result will be another year-long, or possible two-year, patch slapped on this mess. Finding the money to pay for the fix and, more to the point, cobbling together the political coalition to support it, is difficult. Which is why Congress and the administration have joined hands in the pretense that the doc fix has nothing whatsoever to do with health reform.

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The Government We Deserve: Healthcare Edition

So, the battle is joined – the passage of the Senate Finance Bill has forced every healthcare participant whose oxen might be gored into the open, and the fighting is fierce.

I don’t have a dog in the fight from an economic standpoint, unless Washington, D.C. decides to give everyone a full indemnity policy like the New Hampshire state union employees. As a result, I have had a freedom to think and speak in a way that few of my colleagues can.

It took me a while to realize that I would be so alone in this regard. I have been very fortunate to participate for the past five years in two different groups of nationally recognized healthcare executives with very diverse experiences. Several of them are very publicly prominent in the debate, and others are quietly influential. I have hoped that these groups might coalesce, create a blueprint for reform, and lead the way forward. While I am disappointed that has not happened, I am really surprised at how resolutely the group members have retreated to their economic realities or their philosophical ideals. In short, there has been no sustained dialogue with the goal of determining how hospitals, physicians, insurance companies, device manufacturers, pharmaceutical companies and others can create a reformed system. At the same time, I have observed all of us bemoan that “healthcare reform” is really “insurance coverage reform”, and not so impressive at that.

The result is that We, the People, have turned it over to Washington, D.C. In the coming weeks, 535 people who know a lot about politics, a little about the art of compromise, and almost nothing about how approximately 20% of the economy works will decide our future. The 20% of us employed in healthcare have failed to reform ourselves through real and shared sacrifice. The 80% is angry enough not to care that they don’t know the difference between a scalpel and a saw.

In the words of Dandy Don Meredith, some people in healthcare will need to “turn out the lights, the party’s over”. The tricky part is that we won’t know until the very end who that is.

On Wednesday, The Wall Street Journal ran an opinion piece called “Paying the Health Tax in Massachusetts” by an author named Wendy Williams. In it, Ms. Williams lamented that the Commonwealth of Massachusetts changed the definition of acceptable coverage. Her family’s policy no longer meets the requirement, so she must either (a) buy a more expensive policy, which she does not think she needs, or (b) enroll in the government option.

What caught my eye was the following:

Mr. Romney and Sen. Ted Kennedy publicly promised that the middle class – that is, people like us – would not be taxed and that our health-care costs would actually decrease if the plan became law.

My husband and I weren’t convinced. It all seemed inane, but we are neither politically or socially conservative and figured the plan wouldn’t affect us much. Besides, who could be against a plan that covers more people for less money?”

Here in the South, we might respond to that statement by saying, “I’m not sure I would have told that”, but I am afraid the subject is too serious to be that dismissive.

Ms. Williams, in four sentences, has summarized the debate.

First, in order to get elected, politicians have to tell people (us) what we want to hear. Politicians rarely make the call for sacrifice, and today’s America is not interested in that much anyway. Elections for 473 of the 535 positions will be held in 2010. For each of those 473, the calculus over the next 60 days is about how a vote on healthcare reform will play at home between now and November 4, 2010 (Note: “what will get me reelected” is sometimes phrased as “what my constituents want” but rarely as “what does my country need” or “what does courage require”).

Second, We, the People, know better. What is wrong with us? We aren’t that stupid, and we don’t even like Congress. On the other hand, we do seem to like something for nothing. The members of the Greatest Generation have given way to individuals who are more interested in their personal good than the common good. Most of us just listen for what we want to believe and ignore the rest; some of us listen to talk radio and shout at the rest. The Greatest Generation gave way to the Baby Boomers, who seem to be the majority of those in power. The generation of Timothy Leary and “Turn on, tune in, drop out” seems to have taken the “drop out” part to heart, except that Leary’s hope for self-reliance has morphed into singular self-interest.

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It is time for We, the People, to wake up:

  • As we proved spectacularly in Tennessee, you cannot cover more people for less money. No one in Washington, D.C. should know that better than Nancy-Ann Deparle.
  • The results of the Massachusetts experiment are that costs have increased, while quality and access have decreased. These results should be terrifying since Massachusetts had one of the lowest uninsured rates in the nation at the start of the Massachusetts Connector program. Up next, “global payments”, aka capitation – good luck with that at Partners.
  • In The Washington Post, Alec MacGillis reports that maybe the Mayo Clinic is not a model for reform since they restrict access to Medicare and Medicaid patients. As we continue to report, the Mayo Clinic does not deliver high healthcare value.
  • The Senate Finance Bill pretends that physicians will take a 25% cut in pay in 2011 to achieve the $900B cost; it appears that AMA has convinced Senator Reid otherwise.

Sir Winston Churchill famously stated that:
“Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” He also said, “The best argument against democracy is a five-minute conversation with the average voter.” Let’s hope that we do not allow Washington, D.C. to test the former, and let’s see if America can prove Sir Winston wrong on the latter.

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Shared Sacrifice: What Reform Requires

I keep waiting on the President who inspired so many in November 2008 to propose change we can believe in for healthcare reform. To date, the President will not even admit that sacrifices are necessary or inevitable, much less challenge Americans to do their part.

If the economic future of America hangs in the balance, doesn’t that suggest that sacrifice is required? If reform will be painless, then why is everyone fighting so hard in Washington against it?

Of course, true reform will require everyone to sacrifice something, on a scale not seen since World War II.  Today’s editorial in The Washington Post entitled The Health-Care Sacrifice articulates the issue nicely.

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The Mayo Clinic Calls for A “Value Index”

As reported in The Washington Post, the Mayo Clinic and Intermountain Healthcare have called for a “Value Index” as part of health reform:

“The House bill lacks a “value index” under which Medicare reimbursements would be issued not just according to the procedure delivered but according to the quality of the overall care provided for a given episode, which would reward higher-quality providers and, in theory, reduce costs over the long run. “The system must be reformed to compensate for value instead of volume,” the signers write.

In the words of 1970s one-hit wonder Billy Swan, I can help – check out the Hospital Value Index™ at www.hospitalvalueindex.com.

As referenced in our earlier post “Critique of the New Yorker”, the folks at Mayo and in Washington may be surprised at the results.

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Viewpoints on Reform – July 10

As pressure continues to build in Washington this week, several prominent voices are beginning to raise crucial questions:

Meanwhile, many healthcare executives on the provider and payer side wonder when Congress or the White House plan to think about changes to the delivery system itself, as opposed to rearranging the deck chairs on the Titanic. Many with whom I have spoken are especially puzzled given the prominent role of Nancy-Ann DeParle in the reform discussions. Ms. DeParle is very familiar with the provider side of healthcare generally, and one of the first real “medical home” delivery systems was built in her  hometown of Rockwood, Tennessee in 1996.

Real reform will only occur with changes to coverage, payment and delivery systems. Any “reform” that does not address all three legs of the stool will not be reform at all.

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$155B Down, $845B To Go

Ceci Connolly reports that Hospitals Reach Deal With Administration in the July 7 edition of The Washington Post. Unnamed sources report that the American Hospital Association, Federation of American Hospitals and the Catholic Health Association agreed to “contribute $155B over 10 years toward the cost of insuring the 47 million Americans without health coverage.” Approximately $100B will come through reduced Medicare and Medicaid payments, while $40B will come through “slowly reducing what hospitals get to care for the uninsured”, which presumably means lower payments to disproportionate share hospitals.

The White House has previously discussed plans to find $600B of “savings” from providers. In that context, the “contribution” by the hospitals of $155B appears to be a significant win, and the stock market seems to agree this afternoon. However, it is difficult to understand how the balance of providers make up the $445B difference.

Even so, hospitals have not fared as well as the pharmaceutical industry, whose “contribution” of $80B will not accrue to the government. In addition, it is likely that their “sacrifice” will be offset substantially or entirely by an increase in the number of new customers because of lower drug prices or the acquisition of health insurance. Along those lines, The New York Times published Sheryl Gay Stolberg and David Herszenhorn’s article Health Deals Could Harbor Hidden Costs on the front page of the July 8 edition.

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Healthcare Reform = The Health of the U.S. Economy

In today’s edition of The Washington Post, there is an excellent editorial titled The Debt Tsunami.

If you have not been in Washington recently, you may not understand that the tsunami of interest in reform is not based on achieving the dreams of Senator Kennedy. Instead, the AAA bond rating of the United States government is at stake. Most healthcare executives with whom I have spoken don’t seem to understand the enormity of what is happening. Let me help – the President and Congress fully intend to re-engineer 20% of the economy in the next 120 days.

I attended a meeting of a group healthcare executives in Chicago two days after President Obama was elected. What struck me then and has remained with me until today was a comment by David Hefner, the President of the Univeristy of Chicago Medical Center, challenging all of us to reform healthcare from the inside. Those words were very prescient, and they are now urgent. The 80% of those outside the system are pretty frustrated with the 20% of us inside the system, and they are about to tell us how we can do better. The liberation of Iraq may be a good analogy for all of us in healthcare: the majority (which in this case is not subject to debate) feels oppressed, and Washington is about to free them.

I’m not sure the lobbyists can save each of our sacred cows this time, and Americans love hamburgers. Instead, leaders of hospitals, physicians, pharmaceutical companies, device makers and maybe even payers need to barricade themselves in a quiet room until we work it out. I am not talking about photo ops with the President or press releases that lobbyists start backing away from within hours. I am suggesting real reform, the likes of which the country has not seen since World War II. All of us, as businesses and as individuals, must sacrifice something. History suggests that the changes Washington makes for us don’t work as well as those we make for ourselves. The clock is ticking…

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Forget Single-Payer; What About Single-Provider?

Most of the oxygen in Washington is currently being consumed around the debate about the “public option” in which the U.S. government, in one form or another, becomes the dominant or sole payer for healthcare services. In the past week, lobbyists for hospitals, physicians and employers have come out of hiding to decry the inevitable destruction of the private insurance market and the hospital infrastructure if a “public option” were implemented.

For the record, the predicted demise of the private insurance market brings to mind that of Mark Twain. Most of the people that I know on the payer side are very smart, are already focused on health and wellness, and have proved to be survivors over the years. Additionally, the private insurance market in the United Kingdom has proved resilient, if small, despite the presence of the National Health Service. At the end of the day, my prediction is that some facet of the private insurance market as we know it will survive.

What has not been discussed, but is much more disturbing to consider, is a “single-provider” market. In his remarks to the American Medical Association on June 15, President Obama said, “If we do not fix our health care system, America may go the way of GM — paying more, getting less, and going broke.” What is left unsaid is that the U.S. government rescued GM so that “going broke” did not turn into “shutting down”.

For those who scoff at the concept, I assume you bought options in May 2008 to profit from the insight that the U.S. government would own and operate AIG, GM, and Chrysler one year later. For those who did not do that, here is the concept.

Under the “public option” plans being discussed, a government-owned or endorsed plan would pay for services at rates slightly above Medicare. Assuming that the prevailing rate was 110% of Medicare, and assuming that most of the individuals covered under that plan would be migrating from private plans paying on average 140% of Medicare, hospitals would suffer an approximate 25% reduction in revenues for between 10-40% of their business. For the average hospital that operates at a (1)-2% operating margin, a public plan could be disastrous.

At the same time, for most members of the House of Representatives, the local hospital is one of the largest employers in his or her district. What will that Representative do when that hospital is in bankrucpty or in danger of closing? Is the U.S. government as a leading provider of hospital care a crazy one? I hope so. Is the U.S. government as the owner of GM a crazy idea? Not anymore.

So, what does that look like for those of us now called citizens? For a few views of the U.S. government as a provider, check out the article in The New York Times entitled  At V.A Hospital, a Rogue Cancer Unit, the series in The Washington Post entitled Walter Reed and Beyond, this story in USA Today about egregious quality issues captioned Testimony: VA medical gear still being mishandled, or the story in The Washington Post detailing waste in the VA system entitled VA Moves Texas Brain Laboratory After Years Pass Without Testing.

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