Friday, April 29, 2005
DeLay: "The Medicaid system is antiquated"
[Mary Dalrymple, "Congress OKs $2.6 trillion budget," Associated Press, The Lawrence Journal-World, 29 April 2005.]
Congressional leaders are looking to trim Medicaid spending and create a more sustainable program. The question now is whether the result will be true reform or simply cuts:
Congress narrowly passed a $2.6 trillion budget Thursday that would cut spending on the Medicaid health care program for the first time since 1997 in a step toward trimming federal deficits.
House Majority Leader Tom DeLay, R-Texas, said it was time to look closely at benefit programs that were "popular but rife with waste."
"These entitlement programs deserve reform," he said. "The Medicaid system is antiquated and the quality of care is not being brought to the people that need it."
Medicaid gets marked for a $10 billion reduction over four years. The changes in Medicaid wouldn't begin until 2007, giving a special commission and the nation's governors time to recommend cost-saving ideas.
What Medicaid needs is not another "special commission." Let's hope the states take the initiative to initiate change before Congress gets around to it.
[Matthew Hisrich, "Kansas Needs Bold Medicaid Reform," The Wichita Eagle, 21 January 2004.]
[Mary Dalrymple, "Congress OKs $2.6 trillion budget," Associated Press, The Lawrence Journal-World, 29 April 2005.]
Congressional leaders are looking to trim Medicaid spending and create a more sustainable program. The question now is whether the result will be true reform or simply cuts:
Congress narrowly passed a $2.6 trillion budget Thursday that would cut spending on the Medicaid health care program for the first time since 1997 in a step toward trimming federal deficits.
House Majority Leader Tom DeLay, R-Texas, said it was time to look closely at benefit programs that were "popular but rife with waste."
"These entitlement programs deserve reform," he said. "The Medicaid system is antiquated and the quality of care is not being brought to the people that need it."
Medicaid gets marked for a $10 billion reduction over four years. The changes in Medicaid wouldn't begin until 2007, giving a special commission and the nation's governors time to recommend cost-saving ideas.
What Medicaid needs is not another "special commission." Let's hope the states take the initiative to initiate change before Congress gets around to it.
[Matthew Hisrich, "Kansas Needs Bold Medicaid Reform," The Wichita Eagle, 21 January 2004.]
The benefits of a defined out-of-pocket maximum
[Julie Appleby, "Medical costs prove a burden even for some with insurance," USA TODAY, 28 April 2005.]
The high-deductible insurance that is required to open a health savings account is viewed by some as exposing individuals to too high of financial risk. What is often overlooked, however, is that this risk is capped, whereas traditional plans can leave individuals left with significant debts they had no idea they were liable for:
Think your health insurance has you covered? Think again.
Even insured workers can find themselves on the hook for thousands of dollars, often at a time when illness has decreased their income.
Few workers realize the limits of their insurance until the bills start coming for: policies that don't cover rehabilitation care or limit it to a few visits; expensive drugs that come with a 20% charge, rather than a $20 co-pay; separate deductibles for drugs and medical care; doctors at "in-network" hospitals that aren't members of the insurer's network, leaving patients vulnerable to thousands of dollars in bills; annual "out-of-pocket maximums" that aren't always true ceilings on expenses.
Such costs can quickly add up. A drug co-payment of 20%, for example, could cost thousands a year for patients taking some cancer drugs. Avastin, a colon cancer drug, recently went on the market at a price of more than $4,000 a month. Erbitux, another colon cancer treatment, can cost $12,000 or more for a month's treatment. Gleevec, for leukemia, is more than $2,000 a month.
For those that are able to save, health savings accounts may be able to help reverse another dangerous trend:
Many Americans are not prepared. Whether struggling to meet mortgage costs, college tuition and other expenses — or simply buying all the latest gadgets — few are saving enough to weather unexpected bad times. The personal savings rate, the difference between what people earn and what they spend, fell for the second-straight year in 2004 to the lowest level since 1934.
[Matthew Hisrich, "HSAs are increasing Americans' health coverage," The Topeka Capital-Journal, 26 September 2004.]
[Julie Appleby, "Medical costs prove a burden even for some with insurance," USA TODAY, 28 April 2005.]
The high-deductible insurance that is required to open a health savings account is viewed by some as exposing individuals to too high of financial risk. What is often overlooked, however, is that this risk is capped, whereas traditional plans can leave individuals left with significant debts they had no idea they were liable for:
Think your health insurance has you covered? Think again.
Even insured workers can find themselves on the hook for thousands of dollars, often at a time when illness has decreased their income.
Few workers realize the limits of their insurance until the bills start coming for: policies that don't cover rehabilitation care or limit it to a few visits; expensive drugs that come with a 20% charge, rather than a $20 co-pay; separate deductibles for drugs and medical care; doctors at "in-network" hospitals that aren't members of the insurer's network, leaving patients vulnerable to thousands of dollars in bills; annual "out-of-pocket maximums" that aren't always true ceilings on expenses.
Such costs can quickly add up. A drug co-payment of 20%, for example, could cost thousands a year for patients taking some cancer drugs. Avastin, a colon cancer drug, recently went on the market at a price of more than $4,000 a month. Erbitux, another colon cancer treatment, can cost $12,000 or more for a month's treatment. Gleevec, for leukemia, is more than $2,000 a month.
For those that are able to save, health savings accounts may be able to help reverse another dangerous trend:
Many Americans are not prepared. Whether struggling to meet mortgage costs, college tuition and other expenses — or simply buying all the latest gadgets — few are saving enough to weather unexpected bad times. The personal savings rate, the difference between what people earn and what they spend, fell for the second-straight year in 2004 to the lowest level since 1934.
[Matthew Hisrich, "HSAs are increasing Americans' health coverage," The Topeka Capital-Journal, 26 September 2004.]
Thursday, April 28, 2005
Single-payer a disaster in the making
[Michael Arnold Glueck and Robert J. Cihak, "The myths behind 'free' health care," The Orange County Register, 27 April 2005.]
The debate over health care in the U.S. seems to have shifted away from the either/or of socialized medicine or consumer driven health care. Fortunately, belief in the effectiveness of the marketplace appears to have won out. The chimera of a utopia where everything is free but service and quality remains high nonetheless still holds a strong appeal for some:
The reasoning behind these delusions is explained and exposed in detail in a new book, "Lives at Risk: Single-Payer National Health Insurance Around the World," by John C. Goodman, Gerald L. Musgrave and Devon M. Herrick.
The book discusses 20 myths that underlie the push for single-payer national health insurance.
The authors point out that the so-called basic human right to health care in countries with national health insurance is "nothing more than the opportunity to get services for free (or at very little cost) as the government decides to make those services available. But government is under no obligation to provide any particular service."
Government controls costs by imposing global budgets on hospitals and health authorities and limiting supply. As a result, demand exceeds supply for virtually every service, and patients are forced to wait months and even years for treatment.
Rationing of health care occurs in the U.S. too, especially in public hospitals that provide care for the uninsured, and for those on Medicare and Medicaid. In spite of this, average wait times in the U.S. are far shorter than in countries with national health care systems.
For example, 27 percent of Canadian patients and 36 percent of British patients must wait more than four months for elective, non-emergency surgery. By contrast, only about 5 percent of American patients wait that long.
In an article on the problems of unequal access in Britain, Patrick Butler observed: "Generally speaking, the poorer you are and the more socially deprived your area, the worse your care and access is likely to be."
Disparities by region and wealth also exist in the United States. But because emergency rooms cannot turn away any patient and the private medical sector is relatively robust, people in the United States have more actual access to health care services than is available in nationalized systems. We don't want to lose this access.
Rationing, inefficiencies and lack of quality are the real fruits of this socialist experiment. And we need less, not more of it. When patients decide with their own resources, including private insurance and savings, hospitals and physicians pay attention - and meet their needs.
[Michael Arnold Glueck and Robert J. Cihak, "The myths behind 'free' health care," The Orange County Register, 27 April 2005.]
The debate over health care in the U.S. seems to have shifted away from the either/or of socialized medicine or consumer driven health care. Fortunately, belief in the effectiveness of the marketplace appears to have won out. The chimera of a utopia where everything is free but service and quality remains high nonetheless still holds a strong appeal for some:
The reasoning behind these delusions is explained and exposed in detail in a new book, "Lives at Risk: Single-Payer National Health Insurance Around the World," by John C. Goodman, Gerald L. Musgrave and Devon M. Herrick.
The book discusses 20 myths that underlie the push for single-payer national health insurance.
The authors point out that the so-called basic human right to health care in countries with national health insurance is "nothing more than the opportunity to get services for free (or at very little cost) as the government decides to make those services available. But government is under no obligation to provide any particular service."
Government controls costs by imposing global budgets on hospitals and health authorities and limiting supply. As a result, demand exceeds supply for virtually every service, and patients are forced to wait months and even years for treatment.
Rationing of health care occurs in the U.S. too, especially in public hospitals that provide care for the uninsured, and for those on Medicare and Medicaid. In spite of this, average wait times in the U.S. are far shorter than in countries with national health care systems.
For example, 27 percent of Canadian patients and 36 percent of British patients must wait more than four months for elective, non-emergency surgery. By contrast, only about 5 percent of American patients wait that long.
In an article on the problems of unequal access in Britain, Patrick Butler observed: "Generally speaking, the poorer you are and the more socially deprived your area, the worse your care and access is likely to be."
Disparities by region and wealth also exist in the United States. But because emergency rooms cannot turn away any patient and the private medical sector is relatively robust, people in the United States have more actual access to health care services than is available in nationalized systems. We don't want to lose this access.
Rationing, inefficiencies and lack of quality are the real fruits of this socialist experiment. And we need less, not more of it. When patients decide with their own resources, including private insurance and savings, hospitals and physicians pay attention - and meet their needs.
Hungry, Hungry HIPPA
[Meredith Kapushion, "Hungry, hungry HIPAA: when privacy regulations go too far," Fordham Urban Law Journal, November 2004.] (free registration required to view an early version of the article)
The Health Insurance Portability and Accountability Act of 1996, otherwise known as HIPAA, changed the way people interact with the health care industry. While the intended purpose of the act was to protect patient privacy, the unintended consequence is a massive increase in the regulatory burden placed on providers:
HIPAA is not a good deal for patients, the health care industry, or any "covered entity" that has the misfortune to fall within its reach. The advantages of strengthening and simplifying the rules under a uniform standard are gained at the expense of experimentation and competition between states and among providers.
The administrative burdens HIPAA imposes are, at best, a marginal benefit for a small segment of consumers. At its worst, HIPAA imposes costs directly and indirectly on nearly everyone and offers little in return. HIPAA's main agenda of resolving the employer/employee information disclosure problem remains largely unresolved, and HIPAA does nothing to address the underlying agency problem.
In place of a sound policy bolstering privacy protections, HHS has given us a stack of regulations that amount to a costly administrative headache with a number of wealth redistributive effects in tow. Alternatively, we should repeal HIPAA and consider less centralized, more competitive, and more effective options.
[Meredith Kapushion, "Hungry, hungry HIPAA: when privacy regulations go too far," Fordham Urban Law Journal, November 2004.] (free registration required to view an early version of the article)
The Health Insurance Portability and Accountability Act of 1996, otherwise known as HIPAA, changed the way people interact with the health care industry. While the intended purpose of the act was to protect patient privacy, the unintended consequence is a massive increase in the regulatory burden placed on providers:
HIPAA is not a good deal for patients, the health care industry, or any "covered entity" that has the misfortune to fall within its reach. The advantages of strengthening and simplifying the rules under a uniform standard are gained at the expense of experimentation and competition between states and among providers.
The administrative burdens HIPAA imposes are, at best, a marginal benefit for a small segment of consumers. At its worst, HIPAA imposes costs directly and indirectly on nearly everyone and offers little in return. HIPAA's main agenda of resolving the employer/employee information disclosure problem remains largely unresolved, and HIPAA does nothing to address the underlying agency problem.
In place of a sound policy bolstering privacy protections, HHS has given us a stack of regulations that amount to a costly administrative headache with a number of wealth redistributive effects in tow. Alternatively, we should repeal HIPAA and consider less centralized, more competitive, and more effective options.
Two takes on drug importation
[Randy Scholfield, "Rx savings," The Wichita Eagle, 28 April 2005.
Robert Goldberg, "The 'European disease'," The Washington Times, 28 April 2005.
On the same day that Randy Scholfield had this to say about drug importation in The Eagle:
Kansans shouldn't fear the safety of Canadian drugs. But they should fear the influence of the pharmaceutical lobby in Washington, D.C.
Kansans consistently rank affordable prescription drugs as a top domestic issue. And many see drug imports as one way to cope with soaring costs.
Congress' refusal to approve imports is especially galling, considering its shameless pandering to the pharmaceutical industry in the 2004 Medicare prescription drug bill, which prohibited -- prohibited! --Medicare from negotiating with drug companies for discounts.
Gov. Kathleen Sebelius acted in the interests of Kansas consumers in joining the [I-SaveRx] program. It's not a long-term answer to soaring medical costs, but it is an honest attempt to revive a drug-addled Congress.
The Manhattan Institute's Center for Medical Progress director Robert Goldberg states the following in The Washington Times:
Last week, Congress held hearings on the Pharmaceutical Market Access and Drug Safety Act of 2005. This bill forces companies to sell, make and import their products from Canada and elsewhere, where government sets prices and access to medicines.
Forcing companies to basically ship their medicines overseas so they can be discounted and re-sold into America would destroy the global market for new medicines, as it has already done in Europe. Thanks to Europe's version of drug importation, it's biotech companies have no cash, their drug companies launch fewer new products than 10 years ago compared to America and biomedical research dollars have flowed to the United States.
Now, some of the European companies that moved here to escape price controls are already preparing to move again, to Asia, if Congress passes the act.
People wonder why companies don't charge Canada and Europe more. Even when faced with data that different drugs provide important benefits to specific groups of patients, governments in Europe or Canada or Australia use rationing and the threat of not paying for the drug altogether to keep prices low. In Australia, one of the countries that Congress wants to import from, patients taking Gleevec have to sign a contract promising they will go off the drug when the government wants them to. In England and Canada, some drugs that are standard therapy for treating Alzheimer's or lung cancer here are unavailable even after years of delay and price controls.
The coalition that has rallied around price controls likes to say, "A drug that is unaffordable is neither safe nor effective." But as the "European disease" has shown, price controls will not merely make medicines more "affordable." They will make them unavailable and undiscoverable.
Meanwhile, India and China are eager for Congress to impose price controls on our biotech and drug firms. They see them as a competitive advantage. India has 80 firms engaged in modern biotechnology, including protein engineering, molecular design and monoclonal antibodies. Investment in drug research has increased by 400 percent over the past five years because the Indian government has been strengthening patent protection, lifting price controls and allowing nascent drug companies to keep their profits without capital-gains taxes. Drug and biotech executives are hailed as heroes, not public enemies. India, along with Singapore, Korea and China, are giving this generation of "molecular Michaelangos," as we might call them, the wall that our own politicians are destroying.
[Matthew Hisrich, "Sebelius Is Practicing Black-Market Politics," The Wichita Eagle, 10 December 2004.]
[Randy Scholfield, "Rx savings," The Wichita Eagle, 28 April 2005.
Robert Goldberg, "The 'European disease'," The Washington Times, 28 April 2005.
On the same day that Randy Scholfield had this to say about drug importation in The Eagle:
Kansans shouldn't fear the safety of Canadian drugs. But they should fear the influence of the pharmaceutical lobby in Washington, D.C.
Kansans consistently rank affordable prescription drugs as a top domestic issue. And many see drug imports as one way to cope with soaring costs.
Congress' refusal to approve imports is especially galling, considering its shameless pandering to the pharmaceutical industry in the 2004 Medicare prescription drug bill, which prohibited -- prohibited! --Medicare from negotiating with drug companies for discounts.
Gov. Kathleen Sebelius acted in the interests of Kansas consumers in joining the [I-SaveRx] program. It's not a long-term answer to soaring medical costs, but it is an honest attempt to revive a drug-addled Congress.
The Manhattan Institute's Center for Medical Progress director Robert Goldberg states the following in The Washington Times:
Last week, Congress held hearings on the Pharmaceutical Market Access and Drug Safety Act of 2005. This bill forces companies to sell, make and import their products from Canada and elsewhere, where government sets prices and access to medicines.
Forcing companies to basically ship their medicines overseas so they can be discounted and re-sold into America would destroy the global market for new medicines, as it has already done in Europe. Thanks to Europe's version of drug importation, it's biotech companies have no cash, their drug companies launch fewer new products than 10 years ago compared to America and biomedical research dollars have flowed to the United States.
Now, some of the European companies that moved here to escape price controls are already preparing to move again, to Asia, if Congress passes the act.
People wonder why companies don't charge Canada and Europe more. Even when faced with data that different drugs provide important benefits to specific groups of patients, governments in Europe or Canada or Australia use rationing and the threat of not paying for the drug altogether to keep prices low. In Australia, one of the countries that Congress wants to import from, patients taking Gleevec have to sign a contract promising they will go off the drug when the government wants them to. In England and Canada, some drugs that are standard therapy for treating Alzheimer's or lung cancer here are unavailable even after years of delay and price controls.
The coalition that has rallied around price controls likes to say, "A drug that is unaffordable is neither safe nor effective." But as the "European disease" has shown, price controls will not merely make medicines more "affordable." They will make them unavailable and undiscoverable.
Meanwhile, India and China are eager for Congress to impose price controls on our biotech and drug firms. They see them as a competitive advantage. India has 80 firms engaged in modern biotechnology, including protein engineering, molecular design and monoclonal antibodies. Investment in drug research has increased by 400 percent over the past five years because the Indian government has been strengthening patent protection, lifting price controls and allowing nascent drug companies to keep their profits without capital-gains taxes. Drug and biotech executives are hailed as heroes, not public enemies. India, along with Singapore, Korea and China, are giving this generation of "molecular Michaelangos," as we might call them, the wall that our own politicians are destroying.
[Matthew Hisrich, "Sebelius Is Practicing Black-Market Politics," The Wichita Eagle, 10 December 2004.]
Wednesday, April 27, 2005
Hawver: health care is a big-ticket item in Topeka
[Martin Hawver, "Rising welfare costs are next budget showdown," The Wichita Eagle, 27 April 2005.]
Martin Hawver of Hawver's Capitol Report makes the astute observation that education spending cannot dominate legislative attention forever in this column from today's Eagle:
[T]he real issue next session is going to be welfare costs. The first indication of that came last week, when budget experts estimated that the state is going to have to spend at least $19 million between now and June 30 to pay for the basic health care and survival needs of the state's poor and elderly, and of children in homes where there just isn't enough money.
For the fiscal year that starts July 1, the experts predicted the state is going to have to spend $41.6 million more than was projected.
At the Statehouse level, those are big numbers. The state is predicted to spend $1.9 billion on Medicaid, nursing-home care and welfare for Kansans this fiscal year. About $1.3 billion of that is federal money, leaving the state to come up with state tax dollars of about $662 million.
Next fiscal year, the spending is expected to be almost $2 billion, with about $707.4 million of that being state tax dollars.
Unfortunately, as many have done with education, Hawver makes the mistake of associating spending with results:
Legislators are going to be asked to spend increasing amounts of scarce tax dollars on the poor, the old and children -- people most legislators don't see on a daily basis. It means that decisions on where to spend existing money, or whether to raise taxes, are going to pit the poor against everyone else.
That means K-12 education versus welfare. It means higher education versus welfare. It means state employee pay and benefits versus welfare. It means, ultimately, tax increases versus welfare.
What is the missing ingredient here? REFORM. On the one hand, Hawver is right. Without significant reform in Medicaid the decision will be between controls on spending or tax increases. But that need not be the case. If legislators are finally willing to address reform in the next session, then the possibility exists for increased quality of care at a reduced cost.
[Matthew Hisrich, "Staying the Course: Medicaid Reform in Kansas," The Flint Hills Center for Public Policy, February 2004.]
[Martin Hawver, "Rising welfare costs are next budget showdown," The Wichita Eagle, 27 April 2005.]
Martin Hawver of Hawver's Capitol Report makes the astute observation that education spending cannot dominate legislative attention forever in this column from today's Eagle:
[T]he real issue next session is going to be welfare costs. The first indication of that came last week, when budget experts estimated that the state is going to have to spend at least $19 million between now and June 30 to pay for the basic health care and survival needs of the state's poor and elderly, and of children in homes where there just isn't enough money.
For the fiscal year that starts July 1, the experts predicted the state is going to have to spend $41.6 million more than was projected.
At the Statehouse level, those are big numbers. The state is predicted to spend $1.9 billion on Medicaid, nursing-home care and welfare for Kansans this fiscal year. About $1.3 billion of that is federal money, leaving the state to come up with state tax dollars of about $662 million.
Next fiscal year, the spending is expected to be almost $2 billion, with about $707.4 million of that being state tax dollars.
Unfortunately, as many have done with education, Hawver makes the mistake of associating spending with results:
Legislators are going to be asked to spend increasing amounts of scarce tax dollars on the poor, the old and children -- people most legislators don't see on a daily basis. It means that decisions on where to spend existing money, or whether to raise taxes, are going to pit the poor against everyone else.
That means K-12 education versus welfare. It means higher education versus welfare. It means state employee pay and benefits versus welfare. It means, ultimately, tax increases versus welfare.
What is the missing ingredient here? REFORM. On the one hand, Hawver is right. Without significant reform in Medicaid the decision will be between controls on spending or tax increases. But that need not be the case. If legislators are finally willing to address reform in the next session, then the possibility exists for increased quality of care at a reduced cost.
[Matthew Hisrich, "Staying the Course: Medicaid Reform in Kansas," The Flint Hills Center for Public Policy, February 2004.]
Number of uninsured lower than estimated
[Ricardo Alonso-Zaldivar, "Number of Uninsured May Be Overstated, Studies Suggest," The Los Angeles Times, 26 April 2005.
Kevin Freking, "Minnesota leads nation in health insurance coverage," Associated Press, The Lawrence Journal-World, 27 April 2005.]
While the estimate of 45 million uninsured in the U.S. has been in question in the past, a consensus definitely seems to be developing that the number is inflated. Such news should be kept in mind as state rankings of the uninsured make headlines around the country:
The number of Americans without health insurance — one of the most watched and worrisome indicators of economic well-being — may be overstated by as much as 20%, according to research conducted for the government.
That could mean 9 million fewer uninsured, reducing the total to 36 million from the 45 million reported for 2003, the latest year for which data are available.
The over-count appears to stem from technical problems with the Census Bureau's Current Population Survey, but its implications could have broad consequences for the healthcare debate and for a federal child health program that uses survey data to allocate hundreds of millions of dollars to the states.
The push to reassess the number of people lacking health insurance came from Michael O'Grady, a top health economist in the Bush administration. As assistant secretary for planning and evaluation in the Health and Human Services Department, he secured funding for two separate studies and is encouraging government statisticians to work out the discrepancies.
In addition to the disparities among the surveys, statistical reports to Washington from the states also point to a problem, O'Grady said. When individual states report the number of people they actually cover each year through Medicaid, many give totals significantly higher than census estimates.
"There is an undercount of Medicaid coverage," said [Charles T. Nelson, assistant chief of the Census Bureau division that handles income, poverty and health statistics]. "We are looking at ways of improving our estimate so people covered by Medicaid report. There are people with coverage out there who are not reporting coverage."
[Matthew Hisrich, "Greatest increase in uninsured found among wealthy," The Flint Hills Center, 10 May 2004.]
[Ricardo Alonso-Zaldivar, "Number of Uninsured May Be Overstated, Studies Suggest," The Los Angeles Times, 26 April 2005.
Kevin Freking, "Minnesota leads nation in health insurance coverage," Associated Press, The Lawrence Journal-World, 27 April 2005.]
While the estimate of 45 million uninsured in the U.S. has been in question in the past, a consensus definitely seems to be developing that the number is inflated. Such news should be kept in mind as state rankings of the uninsured make headlines around the country:
The number of Americans without health insurance — one of the most watched and worrisome indicators of economic well-being — may be overstated by as much as 20%, according to research conducted for the government.
That could mean 9 million fewer uninsured, reducing the total to 36 million from the 45 million reported for 2003, the latest year for which data are available.
The over-count appears to stem from technical problems with the Census Bureau's Current Population Survey, but its implications could have broad consequences for the healthcare debate and for a federal child health program that uses survey data to allocate hundreds of millions of dollars to the states.
The push to reassess the number of people lacking health insurance came from Michael O'Grady, a top health economist in the Bush administration. As assistant secretary for planning and evaluation in the Health and Human Services Department, he secured funding for two separate studies and is encouraging government statisticians to work out the discrepancies.
In addition to the disparities among the surveys, statistical reports to Washington from the states also point to a problem, O'Grady said. When individual states report the number of people they actually cover each year through Medicaid, many give totals significantly higher than census estimates.
"There is an undercount of Medicaid coverage," said [Charles T. Nelson, assistant chief of the Census Bureau division that handles income, poverty and health statistics]. "We are looking at ways of improving our estimate so people covered by Medicaid report. There are people with coverage out there who are not reporting coverage."
[Matthew Hisrich, "Greatest increase in uninsured found among wealthy," The Flint Hills Center, 10 May 2004.]
Tuesday, April 26, 2005
Reverse mortgages picking up speed
["Reverse mortgages," NCPA Daily Policy Digest, 26 April 2005.]
Stephen Moses of The Center for Long Term Care Financing is one of the nation's biggest proponents of using the untapped equity of housing to help cover the cost of health care for the elderly. As The Boston Globe reports, the idea seems to be catching on:
An increasing number of seniors across the country are taking out reverse mortgages that allow them to convert a portion of the equity in their homes into cash without selling their home. The mortgage is not due until they move or die, when proceeds from the sale of the property can be used to satisfy the loan.
- The number of seniors nationwide who took reverse mortgages in 2004 doubled from the previous year to more than 40,000, according to the U.S. Department of Housing and Urban Development, which insures the loans.
- California, with nearly a third of the mortgages, ranked first, followed by Florida, Texas, and New York; Massachusetts ranked 11th, with 922 loans last year, up from 612 in 2003.
Under the program, the amount owed can never exceed the value of the house, because only a portion of the equity can be tapped.
- Housing and aging specialists say seniors who have watched their homes appreciate in value while their fixed incomes fail to keep pace with rising costs are using money from reverse mortgages to upgrade their lifestyles.
- Beside paying off bills and taking care of necessary expenses such as prescription drugs, they are spending the money on trips and hobbies.
- About 28 million homeowners who are 62 and older are eligible for the loans; the money can be taken as a lump sum, a line of credit, or monthly payments.
[Stephen A. Moses, "Project Proposal: Controlling Medicaid Long-Term Care Costs," The Flint Hills Center, January 2004.]
["Reverse mortgages," NCPA Daily Policy Digest, 26 April 2005.]
Stephen Moses of The Center for Long Term Care Financing is one of the nation's biggest proponents of using the untapped equity of housing to help cover the cost of health care for the elderly. As The Boston Globe reports, the idea seems to be catching on:
An increasing number of seniors across the country are taking out reverse mortgages that allow them to convert a portion of the equity in their homes into cash without selling their home. The mortgage is not due until they move or die, when proceeds from the sale of the property can be used to satisfy the loan.
- The number of seniors nationwide who took reverse mortgages in 2004 doubled from the previous year to more than 40,000, according to the U.S. Department of Housing and Urban Development, which insures the loans.
- California, with nearly a third of the mortgages, ranked first, followed by Florida, Texas, and New York; Massachusetts ranked 11th, with 922 loans last year, up from 612 in 2003.
Under the program, the amount owed can never exceed the value of the house, because only a portion of the equity can be tapped.
- Housing and aging specialists say seniors who have watched their homes appreciate in value while their fixed incomes fail to keep pace with rising costs are using money from reverse mortgages to upgrade their lifestyles.
- Beside paying off bills and taking care of necessary expenses such as prescription drugs, they are spending the money on trips and hobbies.
- About 28 million homeowners who are 62 and older are eligible for the loans; the money can be taken as a lump sum, a line of credit, or monthly payments.
[Stephen A. Moses, "Project Proposal: Controlling Medicaid Long-Term Care Costs," The Flint Hills Center, January 2004.]
Medical tourism highlighted on "60 Minutes"
["Vacation, Adventure And Surgery?," 60 Minutes, CBSNews.com, 24 April 2005.]
If you had the opportunity to hear Howard Wizig speak at one of our HSA Workshops in Kansas City or Wichita recently, you probably remember him talking about HowardsHeart.com. This site tells the true story of a man who could not afford medical care in the U.S., and so decided to seek treatment abroad. Now, similar stories are popping up all over the place, and major media outlets are picking up on the ambitions of countries such as India, that seek to be the "world destination for health care":
Summertime. It’s almost upon us. Millions will be heading out to foreign lands for vacation, adventure, tourism, or just a beautiful beach. But how about hip surgery or a multiple bypass or a facelift?
A growing number of tourists are doing just that: combining holidays with health care. And that’s because a growing number of countries are offering first-rate medical care at third-world prices.
Many of these medical tourists can’t afford health care at home; the 40 million uninsured Americans, for example. Others are going for procedures not covered by their insurance: cosmetic surgery, infertility treatment.
And the hospitals in these faraway countries are glad to have these medical tourists. In fact, they are courting their business, trying to get more people to outsource their own health care.
A video of this segment is available here.
["Vacation, Adventure And Surgery?," 60 Minutes, CBSNews.com, 24 April 2005.]
If you had the opportunity to hear Howard Wizig speak at one of our HSA Workshops in Kansas City or Wichita recently, you probably remember him talking about HowardsHeart.com. This site tells the true story of a man who could not afford medical care in the U.S., and so decided to seek treatment abroad. Now, similar stories are popping up all over the place, and major media outlets are picking up on the ambitions of countries such as India, that seek to be the "world destination for health care":
Summertime. It’s almost upon us. Millions will be heading out to foreign lands for vacation, adventure, tourism, or just a beautiful beach. But how about hip surgery or a multiple bypass or a facelift?
A growing number of tourists are doing just that: combining holidays with health care. And that’s because a growing number of countries are offering first-rate medical care at third-world prices.
Many of these medical tourists can’t afford health care at home; the 40 million uninsured Americans, for example. Others are going for procedures not covered by their insurance: cosmetic surgery, infertility treatment.
And the hospitals in these faraway countries are glad to have these medical tourists. In fact, they are courting their business, trying to get more people to outsource their own health care.
A video of this segment is available here.
Monday, April 25, 2005
What will a gray Kansas mean for the state budget?
[Joel Mathis, "Aging work force," The Lawrence Journal-World, 24 April 2005.
Robert Tanner, "Governors assessing Medicaid reform," Associated Press, The Lawrence Journal-World, 25 April 2005.]
The population is Kansas is aging, and the impact on Medicaid will be serious as fewer workers are expected to support a growing population of elderly:
he U.S. Census Bureau reported last week that the percentage of elderly Kansans will rise from 12.4 percent of the population in 2000 to more than 20 percent by 2030.
At the same time, the proportion of 18-to-65-year-olds will dip from 60 percent to 55 percent -- meaning there will be a smaller ratio of income earners to pay for the increased services required by the growing number of elderly.
"We are going to have fewer workers out there," said Xan Wedel, a researcher at Kansas University's Policy Research Institute.
According to the Census, Kansas will grow by 9.4 percent between 2000 and 2030, to more than 2.9 million people. That lags far behind the expected growth of 29 percent nationwide during the same time, diminishing the state's relative size -- dropping from 32nd to 35th in the population rankings.
Kansas already has a higher ratio of residents older than age 65 than the national average, but the Census estimates the aging population and diminishing work force will reflect national trends.
That doesn't mean changes won't be costly. Duane Goossen, the state's budget director, said that the state's Medicaid payments -- for nursing home and medical care -- already had risen an average of 12 percent a year during the last half decade, driven both by rising health care costs and the growing number of elderly people in the state.
That trend isn't going to slow down as the state continues to age, Goossen said.
"That's huge," he said. "The rest of the state budget doesn't grow at near that pace, and our revenues don't grow at near that pace. We are trying to factor that kind of percentage increase into our thinking."
State governors around the country are beginning to understand the severity of the situation and are collectively working on some solutions. The question will be whether such efforts will be significant enough and soon enough to make a difference:
The nation's governors, weighing what to tell Congress they want from Medicaid reform, may take aim at the common practice of seniors giving away their assets so the government pays for nursing home care. They could also demand that the poor pay a share -- or a greater share -- of their health care bills.
Those proposals, along with more consumer-friendly recommendations like tax credits for long-term care insurance, are being circulated among the governors in a 12-page document -- a working draft of a statement that could be taken to Congress and the Bush administration. The idea is that the governors would have a united position in the debate over how to rein in soaring costs of the state-federal health care program for the poor.
Governors have not yet agreed on the recommendations and it's unclear yet whether a majority will, according to interviews with governors, state Medicaid officials, aides and health care professionals who have been involved or apprised of the discussions and seen the draft document.
[Matthew Hisrich, "A Backgrounder on Kansas Medicaid," The Flint Hills Center, 19 July 2004.]
[Joel Mathis, "Aging work force," The Lawrence Journal-World, 24 April 2005.
Robert Tanner, "Governors assessing Medicaid reform," Associated Press, The Lawrence Journal-World, 25 April 2005.]
The population is Kansas is aging, and the impact on Medicaid will be serious as fewer workers are expected to support a growing population of elderly:
he U.S. Census Bureau reported last week that the percentage of elderly Kansans will rise from 12.4 percent of the population in 2000 to more than 20 percent by 2030.
At the same time, the proportion of 18-to-65-year-olds will dip from 60 percent to 55 percent -- meaning there will be a smaller ratio of income earners to pay for the increased services required by the growing number of elderly.
"We are going to have fewer workers out there," said Xan Wedel, a researcher at Kansas University's Policy Research Institute.
According to the Census, Kansas will grow by 9.4 percent between 2000 and 2030, to more than 2.9 million people. That lags far behind the expected growth of 29 percent nationwide during the same time, diminishing the state's relative size -- dropping from 32nd to 35th in the population rankings.
Kansas already has a higher ratio of residents older than age 65 than the national average, but the Census estimates the aging population and diminishing work force will reflect national trends.
That doesn't mean changes won't be costly. Duane Goossen, the state's budget director, said that the state's Medicaid payments -- for nursing home and medical care -- already had risen an average of 12 percent a year during the last half decade, driven both by rising health care costs and the growing number of elderly people in the state.
That trend isn't going to slow down as the state continues to age, Goossen said.
"That's huge," he said. "The rest of the state budget doesn't grow at near that pace, and our revenues don't grow at near that pace. We are trying to factor that kind of percentage increase into our thinking."
State governors around the country are beginning to understand the severity of the situation and are collectively working on some solutions. The question will be whether such efforts will be significant enough and soon enough to make a difference:
The nation's governors, weighing what to tell Congress they want from Medicaid reform, may take aim at the common practice of seniors giving away their assets so the government pays for nursing home care. They could also demand that the poor pay a share -- or a greater share -- of their health care bills.
Those proposals, along with more consumer-friendly recommendations like tax credits for long-term care insurance, are being circulated among the governors in a 12-page document -- a working draft of a statement that could be taken to Congress and the Bush administration. The idea is that the governors would have a united position in the debate over how to rein in soaring costs of the state-federal health care program for the poor.
Governors have not yet agreed on the recommendations and it's unclear yet whether a majority will, according to interviews with governors, state Medicaid officials, aides and health care professionals who have been involved or apprised of the discussions and seen the draft document.
[Matthew Hisrich, "A Backgrounder on Kansas Medicaid," The Flint Hills Center, 19 July 2004.]
Mike Bond on Medicaid
[Michael Bond, "Improve Medicaid quality with market reforms," The Tallahassee Democrat, 23 April 2005.]
Michael Bond, who spoke on Medicaid reform for Flint Hills in Kansas last year, is urging systematic overhaul of the program in states around the country. Here is a recent commentary from a paper in Florida:
Virtually every state - including Florida - is looking for ways to put its Medicaid plan on a sustainable fiscal basis.
Equally important, though, is the critical problem of addressing the quality of care provided to Medicaid participants. Any reform that deals with solely the program's costs ignores the important issue of quality.
The source of these problems is twofold. First, Medicaid reimbursements to providers are not determined in a private market but instead are "administered" prices that are determined by government edict.
The second symptom of stingy Medicaid payments is low-quality care. Because it is extremely difficult to control utilization in fee-for-service plans, some Medicaid providers respond by providing low-quality care. They cram their schedules with more (and shorter) office visits, order unnecessary tests, lengthen hospital stays and engage in outright billing fraud.
[T]urning the delivery of Medicaid services into a competitive marketplace will dramatically reduce these quality problems. First, it will ultimately replace all fee-for-service and cost-based reimbursement schemes with prepaid managed-care plans. Second, by providing beneficiaries with funding and the right to choose the medical services they need from competing providers, the marketplace will innovate to deliver higher-quality care while simultaneously innovating to control costs.
[Michael Bond and Matthew Hisrich, "Medicaid Lessons From Former Communists," Wichita Independent Business Association Newsletter, February 2005.]
[Michael Bond, "Improve Medicaid quality with market reforms," The Tallahassee Democrat, 23 April 2005.]
Michael Bond, who spoke on Medicaid reform for Flint Hills in Kansas last year, is urging systematic overhaul of the program in states around the country. Here is a recent commentary from a paper in Florida:
Virtually every state - including Florida - is looking for ways to put its Medicaid plan on a sustainable fiscal basis.
Equally important, though, is the critical problem of addressing the quality of care provided to Medicaid participants. Any reform that deals with solely the program's costs ignores the important issue of quality.
The source of these problems is twofold. First, Medicaid reimbursements to providers are not determined in a private market but instead are "administered" prices that are determined by government edict.
The second symptom of stingy Medicaid payments is low-quality care. Because it is extremely difficult to control utilization in fee-for-service plans, some Medicaid providers respond by providing low-quality care. They cram their schedules with more (and shorter) office visits, order unnecessary tests, lengthen hospital stays and engage in outright billing fraud.
[T]urning the delivery of Medicaid services into a competitive marketplace will dramatically reduce these quality problems. First, it will ultimately replace all fee-for-service and cost-based reimbursement schemes with prepaid managed-care plans. Second, by providing beneficiaries with funding and the right to choose the medical services they need from competing providers, the marketplace will innovate to deliver higher-quality care while simultaneously innovating to control costs.
[Michael Bond and Matthew Hisrich, "Medicaid Lessons From Former Communists," Wichita Independent Business Association Newsletter, February 2005.]
Friday, April 22, 2005
HSA Workshop featuring U.S. Treasury official a success
"More than 140 Wichita business owners, insurance agents and benefits managers turned out for a three-hour workshop Monday to learn about health savings accounts.
"The event, sponsored by several Wichita business organizations, was organized by the Flint Hills Center for Public Policy and offered in-depth information on what HSAs are, how they work and what kind of tax advantages they can provide," reports Phyllis Jacobs Griekspoor of The Wichita Eagle.
For more information, click here.
"More than 140 Wichita business owners, insurance agents and benefits managers turned out for a three-hour workshop Monday to learn about health savings accounts.
"The event, sponsored by several Wichita business organizations, was organized by the Flint Hills Center for Public Policy and offered in-depth information on what HSAs are, how they work and what kind of tax advantages they can provide," reports Phyllis Jacobs Griekspoor of The Wichita Eagle.
For more information, click here.
CAHI counters “healthy and wealthy” argument
[Victoria Craig Bunce and Merrill Matthews, Ph.D., "HSAs: Need Only the Healthy and Wealthy Apply?," The Council for Affordable Health Insurance, April 2005.]
HSA detractors seem to be switching gears from saying that they will only appeal to the young, healthy, and wealthy. Instead, the reasoning now seems to be along the lines of “well, they may work for some, but not everybody." Essentially it’s just a variant of the original argument, but the difference is the latter requires no evidence, since the evidence is mounting against the former:
For more than a decade, critics of consumer driven policies have claimed HSAs would only attract healthy people and lead to adverse selection, in which some plans end up covering a disproportionate number of sick people. Adverse selection drives up premiums, making policies unaffordable. The critics also assert that wealthy people will want HSAs, but not those with lower incomes.
Clearly the recent HSA survey data prove the critics wrong. Middle-aged workers are more likely to choose an HSA, and lower-income workers often choose HSAs when given the chance.
When patients are paying more attention to the cost of health care and demanding value for their dollars, total health care spending will decline. And when spending declines, health insurance will be much more affordable, which will reduce the number of uninsured.
It is time for the critics to look at the data and abandon their doomsday warnings. HSAs are here and they are doing very well, and they are changing the way people think about and shop for health care.
[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]
[Victoria Craig Bunce and Merrill Matthews, Ph.D., "HSAs: Need Only the Healthy and Wealthy Apply?," The Council for Affordable Health Insurance, April 2005.]
HSA detractors seem to be switching gears from saying that they will only appeal to the young, healthy, and wealthy. Instead, the reasoning now seems to be along the lines of “well, they may work for some, but not everybody." Essentially it’s just a variant of the original argument, but the difference is the latter requires no evidence, since the evidence is mounting against the former:
For more than a decade, critics of consumer driven policies have claimed HSAs would only attract healthy people and lead to adverse selection, in which some plans end up covering a disproportionate number of sick people. Adverse selection drives up premiums, making policies unaffordable. The critics also assert that wealthy people will want HSAs, but not those with lower incomes.
Clearly the recent HSA survey data prove the critics wrong. Middle-aged workers are more likely to choose an HSA, and lower-income workers often choose HSAs when given the chance.
When patients are paying more attention to the cost of health care and demanding value for their dollars, total health care spending will decline. And when spending declines, health insurance will be much more affordable, which will reduce the number of uninsured.
It is time for the critics to look at the data and abandon their doomsday warnings. HSAs are here and they are doing very well, and they are changing the way people think about and shop for health care.
[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]
Thursday, April 21, 2005
Concierge medicine not only for the rich
[Kathleen Longcore, "A new kind of care: 'Concierge' medicine grows as a reaction to insurance-dominated doctoring," The Grand Rapids Press, 17 April 2005.]
Concierge or boutique medicine is catching on around the country, but not necessarily with those who you might expect. The availability of such an option is attractive to those with high-deductible insurance policies who are looking to cut the costs and uncertainty of traditional care:
Linda Berens works three days a week as a Holland hotel clerk and can barely afford to put gas in the car or food on the table. It takes all she makes to pay for high-deductible health insurance that provides only hospitalization and no basic care.
So the 51-year-old Allegan County resident was intrigued when she saw Dr. Mark Newberry's newspaper ad promising primary care for $1,500 per person or $2,000 per family for a year.
Berens, who has asthma and allergies, had been shelling out $50 a week just for allergy shots. So she called Newberry's Holland office.
Newberry answered the phone.
"He's the first doctor I've ever had that answered his own phone," Berens said, and she got right in for an appointment. "He spent an hour with me."
When Berens bought Newberry's basic care plan -- which covers the cost of the shot, though she pays for the prescription -- she became part of a trend in health care known as concierge medicine. It's also called boutique medicine, retainer-based medicine and membership-based medicine.
Concierge doctors say they're making a good living with 150 to 500 patients instead of the 2,500 to 5,000 many doctors carry on their rolls.
They don't have to rush their patients through office visits, which both improves relationships and cuts down on the potential for mistakes, they say.
And by cutting out insurance companies, they say they can do what's best for their patients. They don't have to see what the insurance company will cover.
No matter the market force, consumer-driven health plans, including health savings accounts, will keep changing the health care industry, [Physicians Organization of West Michigan executive director Dave] Silliven said. And doctors will have to respond in order to survive.
He predicts prepaid medicine will become "a booming area of private practice" as more workers lose health insurance or switch to high-deductible plans.
"Medicine is a business. And the marketplace will determine acceptance of these new ways to pay for health care," Silliven said.
[Greg Scandlen, "Choice is revolutionizing health care," The Flint Hills Center, 28 September 2004.]
[Kathleen Longcore, "A new kind of care: 'Concierge' medicine grows as a reaction to insurance-dominated doctoring," The Grand Rapids Press, 17 April 2005.]
Concierge or boutique medicine is catching on around the country, but not necessarily with those who you might expect. The availability of such an option is attractive to those with high-deductible insurance policies who are looking to cut the costs and uncertainty of traditional care:
Linda Berens works three days a week as a Holland hotel clerk and can barely afford to put gas in the car or food on the table. It takes all she makes to pay for high-deductible health insurance that provides only hospitalization and no basic care.
So the 51-year-old Allegan County resident was intrigued when she saw Dr. Mark Newberry's newspaper ad promising primary care for $1,500 per person or $2,000 per family for a year.
Berens, who has asthma and allergies, had been shelling out $50 a week just for allergy shots. So she called Newberry's Holland office.
Newberry answered the phone.
"He's the first doctor I've ever had that answered his own phone," Berens said, and she got right in for an appointment. "He spent an hour with me."
When Berens bought Newberry's basic care plan -- which covers the cost of the shot, though she pays for the prescription -- she became part of a trend in health care known as concierge medicine. It's also called boutique medicine, retainer-based medicine and membership-based medicine.
Concierge doctors say they're making a good living with 150 to 500 patients instead of the 2,500 to 5,000 many doctors carry on their rolls.
They don't have to rush their patients through office visits, which both improves relationships and cuts down on the potential for mistakes, they say.
And by cutting out insurance companies, they say they can do what's best for their patients. They don't have to see what the insurance company will cover.
No matter the market force, consumer-driven health plans, including health savings accounts, will keep changing the health care industry, [Physicians Organization of West Michigan executive director Dave] Silliven said. And doctors will have to respond in order to survive.
He predicts prepaid medicine will become "a booming area of private practice" as more workers lose health insurance or switch to high-deductible plans.
"Medicine is a business. And the marketplace will determine acceptance of these new ways to pay for health care," Silliven said.
[Greg Scandlen, "Choice is revolutionizing health care," The Flint Hills Center, 28 September 2004.]
Friday, April 15, 2005
"Me-too" drugs not without value
[Press Release, "Pharmocoevolution: the benefits of incremental innovation," The International Policy Network, 16 March 2005.]
The Center for Pharmaceutical Health Services Research at Temple University and The International Policy Network teamed up to provide this intriguinig look at the benefits of much-maligned me-too drugs - those that are similar, but slightly different, from existing medications. Their conclusion? Not surprisingly, the market is achieving gains in spite of the naysayers:
Incremental improvements to medicines are fundamental to enhancing the overall quality of health care. Many of the resulting medicines are inevitably very similar to existing treatments, treating the same ailment(s) in a similar way. Some have claimed that investment in the development of such drugs is wasteful.
However, these drugs often have subtle pharmacological differences which make them more appropriate for specific groups of patients. Some have fewer side effects with certain patients, which confers all manner of advantages, including better compliance and consequently reduced resistance. Others are more efficacious for particular patients. Furthermore, most of the drugs that exist today are the result of a long process of incremental innovation.
From an economic standpoint, increasing the number of medicines within a class results in lower drug prices because it increases competition between manufacturers. Furthermore, pharmaceutical companies depend on incremental innovations to provide the revenue that will support the development of more risky “block-buster” drugs. Policies that aim to curb incremental innovation will ultimately lead to a reduction in the overall quality of medicines in existing classes of drugs, and may ultimately hinder the creation of genuinely novel drugs.
[Press Release, "Pharmocoevolution: the benefits of incremental innovation," The International Policy Network, 16 March 2005.]
The Center for Pharmaceutical Health Services Research at Temple University and The International Policy Network teamed up to provide this intriguinig look at the benefits of much-maligned me-too drugs - those that are similar, but slightly different, from existing medications. Their conclusion? Not surprisingly, the market is achieving gains in spite of the naysayers:
Incremental improvements to medicines are fundamental to enhancing the overall quality of health care. Many of the resulting medicines are inevitably very similar to existing treatments, treating the same ailment(s) in a similar way. Some have claimed that investment in the development of such drugs is wasteful.
However, these drugs often have subtle pharmacological differences which make them more appropriate for specific groups of patients. Some have fewer side effects with certain patients, which confers all manner of advantages, including better compliance and consequently reduced resistance. Others are more efficacious for particular patients. Furthermore, most of the drugs that exist today are the result of a long process of incremental innovation.
From an economic standpoint, increasing the number of medicines within a class results in lower drug prices because it increases competition between manufacturers. Furthermore, pharmaceutical companies depend on incremental innovations to provide the revenue that will support the development of more risky “block-buster” drugs. Policies that aim to curb incremental innovation will ultimately lead to a reduction in the overall quality of medicines in existing classes of drugs, and may ultimately hinder the creation of genuinely novel drugs.
Congressional fashionistas
[Anne Applebaum, "The Drug Approval Pendulum," The Washington Post, 13 April 2005.]
What a difference a decade makes. As columnist Anne Applebaum points out in this recent column, all of the prescription drug scares of late clash with the push for new drugs fast that was the clarion call of legislators in the recent past:
Most of the time, when we use the word "fashion," we are talking about hemlines, or footwear, or shades of nail polish. But there are also intellectual fashions, literary fashions, political fashions. In fact, almost any sphere of human activity is subject to abrupt shifts in conventional wisdom: Even the arcane world of pharmaceutical regulation is afflicted by highly emotional mood swings.
To see what I mean, think back to the early 1990s.
House Speaker Newt Gingrich (R-Ga.) called the FDA the "leading job killer in America." House Commerce Committee Chairman Joe Barton (R-Tex.) declared that the FDA should stop ruling on the efficacy of drugs at all and stick to measuring whether they are "safe, pure, and packaged safely."
Thanks to sentiments such as these, Congress in 1992 passed the Prescription Drug User Fee Act. Among other things, the new law pressured drug regulators to speed up their review procedures, even rushing some life-saving drugs through the approval process in a mere six months. The law was reauthorized. Twice.
For a short time, harmony reigned. But then the pendulum began to swing, the winds of fashion began to blow in a different direction, and the FDA, once a bureaucratic monolith bearing down on the brave new world of pharmaceutical research, somehow managed to become the FDA, a bureaucratic castrato cozying up to the greedy pharmaceutical companies.
Clearly, caution is now "in." Patients' rights are "out." Risk-averseness is "in." Hot new research is "out." "There is no doubt that there has been a cultural change," the director of the FDA's Office of New Drugs told a reporter last week. And there is no doubt that Congress, along with everybody else, sincerely believes that the change is, will be, and should be permanent. How little we know of fashion!
[Anne Applebaum, "The Drug Approval Pendulum," The Washington Post, 13 April 2005.]
What a difference a decade makes. As columnist Anne Applebaum points out in this recent column, all of the prescription drug scares of late clash with the push for new drugs fast that was the clarion call of legislators in the recent past:
Most of the time, when we use the word "fashion," we are talking about hemlines, or footwear, or shades of nail polish. But there are also intellectual fashions, literary fashions, political fashions. In fact, almost any sphere of human activity is subject to abrupt shifts in conventional wisdom: Even the arcane world of pharmaceutical regulation is afflicted by highly emotional mood swings.
To see what I mean, think back to the early 1990s.
House Speaker Newt Gingrich (R-Ga.) called the FDA the "leading job killer in America." House Commerce Committee Chairman Joe Barton (R-Tex.) declared that the FDA should stop ruling on the efficacy of drugs at all and stick to measuring whether they are "safe, pure, and packaged safely."
Thanks to sentiments such as these, Congress in 1992 passed the Prescription Drug User Fee Act. Among other things, the new law pressured drug regulators to speed up their review procedures, even rushing some life-saving drugs through the approval process in a mere six months. The law was reauthorized. Twice.
For a short time, harmony reigned. But then the pendulum began to swing, the winds of fashion began to blow in a different direction, and the FDA, once a bureaucratic monolith bearing down on the brave new world of pharmaceutical research, somehow managed to become the FDA, a bureaucratic castrato cozying up to the greedy pharmaceutical companies.
Clearly, caution is now "in." Patients' rights are "out." Risk-averseness is "in." Hot new research is "out." "There is no doubt that there has been a cultural change," the director of the FDA's Office of New Drugs told a reporter last week. And there is no doubt that Congress, along with everybody else, sincerely believes that the change is, will be, and should be permanent. How little we know of fashion!
Thursday, April 14, 2005
Kiplinger's reports on improved investing options for HSAs
[Kimberly Lankford, "Choice Comes to Health Savings," Kiplinger.com, April 2005.]
As consumers begin to build up sustantial assets in their health savings accounts, financial institutions are stepping up to the plate to offer better options on what to do with the funds:
Folks who can afford it pay their out-of-pocket expenses with non-HSA money, just so they can leave their tax-sheltered accounts untouched. One hitch: Until recently, HSA investing options were severely limited. When the Pirtles opened their HSA, most plans offered only fixed-rate accounts paying a puny 2% to 4%. Few allowed mutual fund or stock choices, primarily because balances were small and many people needed to have the money available to pay their medical bills. But now that HSA owners are accumulating thousands of dollars, they're demanding better long-term investments.
And the market is responding. A handful of companies now let you invest HSA money in funds or directly into stocks, and several major banks and investment firms are planning to enter the HSA business soon. "Within a year, the majority of the trustees and administrators will have an investment option," predicts Dan Perrin, executive director of the HSA Coalition and publisher of the HSA Insider newsletter.
Several big banks are entering the HSA business and are gradually expanding their investing options, too. Mellon Financial Corp. has paired with several health insurance companies (including many Blue Cross and Blue Shield plans) to provide an HSA, which currently offers a fixed account and three Dreyfus mutual funds. "We will be adding to that this year, and we're looking to offer a full brokerage option down the road," says Steve Hooper, director of HSA product management. JPMorgan Chase offers its HSA in conjunction with Cigna, several Blue Cross and Blue Shield plans, and other large insurers. It allows investments in mutual funds as well as a fixed account, and it plans to beef up its offerings this spring.
Both Wells Fargo and Fidelity plan to introduce HSAs for individuals within about a year. "I think there's going to be continuous evolution in the product, and we're not done seeing enhancements," says Brad Kimler, a senior vice-president at Fidelity.
Meanwhile, eHealthInsurance will soon offer a menu of HSAs from several companies -- some paired with health insurers and others available separately. It already offers a plan with thousands of mutual funds and full brokerage options.
[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]
[Kimberly Lankford, "Choice Comes to Health Savings," Kiplinger.com, April 2005.]
As consumers begin to build up sustantial assets in their health savings accounts, financial institutions are stepping up to the plate to offer better options on what to do with the funds:
Folks who can afford it pay their out-of-pocket expenses with non-HSA money, just so they can leave their tax-sheltered accounts untouched. One hitch: Until recently, HSA investing options were severely limited. When the Pirtles opened their HSA, most plans offered only fixed-rate accounts paying a puny 2% to 4%. Few allowed mutual fund or stock choices, primarily because balances were small and many people needed to have the money available to pay their medical bills. But now that HSA owners are accumulating thousands of dollars, they're demanding better long-term investments.
And the market is responding. A handful of companies now let you invest HSA money in funds or directly into stocks, and several major banks and investment firms are planning to enter the HSA business soon. "Within a year, the majority of the trustees and administrators will have an investment option," predicts Dan Perrin, executive director of the HSA Coalition and publisher of the HSA Insider newsletter.
Several big banks are entering the HSA business and are gradually expanding their investing options, too. Mellon Financial Corp. has paired with several health insurance companies (including many Blue Cross and Blue Shield plans) to provide an HSA, which currently offers a fixed account and three Dreyfus mutual funds. "We will be adding to that this year, and we're looking to offer a full brokerage option down the road," says Steve Hooper, director of HSA product management. JPMorgan Chase offers its HSA in conjunction with Cigna, several Blue Cross and Blue Shield plans, and other large insurers. It allows investments in mutual funds as well as a fixed account, and it plans to beef up its offerings this spring.
Both Wells Fargo and Fidelity plan to introduce HSAs for individuals within about a year. "I think there's going to be continuous evolution in the product, and we're not done seeing enhancements," says Brad Kimler, a senior vice-president at Fidelity.
Meanwhile, eHealthInsurance will soon offer a menu of HSAs from several companies -- some paired with health insurers and others available separately. It already offers a plan with thousands of mutual funds and full brokerage options.
[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]
Tuesday, April 12, 2005
Settle your doctor's bill before you leave the office
[Karen Bells, "Speeding the flow of co-pays," The Cincinnati Business Courier, 11 April 2005.]
Progress continues to be made in the effort to improve the viability of health savings accounts and reduce the administrative overhead of physicians:
UnitedHealthcare is rolling out a program that will provide real-time payments to physicians through direct deposit. The change will apply when UHC enrollees who have health savings accounts or health reimbursement accounts use their medical ID card to make a payment.
The enrollee, or patient, uses the "swipe card" at the doctor's office to pay the co-payment and other uncovered portions of services from the HSA or HRA account with money he or she has designated for health costs through the employer. The money then will be deposited directly into the physicians office's account.
"Our vision is to gain real-time autoadjudication of every process," [Dorothy Coleman of UnitedHealthcare] said. "You'll see a lot more automation adopted in health care. We have to eliminate that 30 to 35 percent waste."
[William C. Short, "HSAs treat ills of health care payment system," The Business Journal of Kansas City, 25 March 2005.]
[Karen Bells, "Speeding the flow of co-pays," The Cincinnati Business Courier, 11 April 2005.]
Progress continues to be made in the effort to improve the viability of health savings accounts and reduce the administrative overhead of physicians:
UnitedHealthcare is rolling out a program that will provide real-time payments to physicians through direct deposit. The change will apply when UHC enrollees who have health savings accounts or health reimbursement accounts use their medical ID card to make a payment.
The enrollee, or patient, uses the "swipe card" at the doctor's office to pay the co-payment and other uncovered portions of services from the HSA or HRA account with money he or she has designated for health costs through the employer. The money then will be deposited directly into the physicians office's account.
"Our vision is to gain real-time autoadjudication of every process," [Dorothy Coleman of UnitedHealthcare] said. "You'll see a lot more automation adopted in health care. We have to eliminate that 30 to 35 percent waste."
[William C. Short, "HSAs treat ills of health care payment system," The Business Journal of Kansas City, 25 March 2005.]
Devon Herrick on HSAs
[Meena Thiruvengadam, "Employers probe health care options," The San Antonio Express-News, 11 April 2005.]
NCPA's Devon Herrick, who authored the recent Flint Hills Center policy brief on health savings accounts, counters concerns over how the accounts will be utlized with personal experience in this article:
Consumer-driven plans have high deductibles — often between $1,000 and $5,000 for an individual or up to $10,000 for a family. They push employees to be economical in their medical decision-making, weighing the full cost of the service against their need for it.
Employers generally will deposit money into accounts employees can use to pay their medical bills in full. Once that fund is depleted, employees must pay out-of-pocket for services until their deductibles are met, at which time the plans will cover all expenses.
"The whole idea is they give us the money and we decide what we want," said Devon Herrick, a health economist with the National Center for Policy Analysis, a Dallas-based nonprofit think tank. "It gives patients incentives to be wise consumers — to decide what they really need, not just what they think they want."
With 85 percent of medical costs being paid by third parties under traditional health plans, Herrick said patients rarely have a reason not to be wasteful with their health benefits. "We buy a lot more because we're not paying the bill," he said. "We have an incentive to consume more than we would otherwise."
Critics worry consumer-driven plans — because they significantly increase patient payments for services — may keep employees from seeking the medical care they need. There also is concern employees won't make better medical decisions.
Herrick, who was insured by a consumer-driven health plan for about three years, believes the worries are unfounded. "I took care of my health needs. But because I knew that money was mine, I didn't waste doctors' visits, and I used over-the-counter medicine when I could," he said. "I made it a point not to waste healthcare."
[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]
[Meena Thiruvengadam, "Employers probe health care options," The San Antonio Express-News, 11 April 2005.]
NCPA's Devon Herrick, who authored the recent Flint Hills Center policy brief on health savings accounts, counters concerns over how the accounts will be utlized with personal experience in this article:
Consumer-driven plans have high deductibles — often between $1,000 and $5,000 for an individual or up to $10,000 for a family. They push employees to be economical in their medical decision-making, weighing the full cost of the service against their need for it.
Employers generally will deposit money into accounts employees can use to pay their medical bills in full. Once that fund is depleted, employees must pay out-of-pocket for services until their deductibles are met, at which time the plans will cover all expenses.
"The whole idea is they give us the money and we decide what we want," said Devon Herrick, a health economist with the National Center for Policy Analysis, a Dallas-based nonprofit think tank. "It gives patients incentives to be wise consumers — to decide what they really need, not just what they think they want."
With 85 percent of medical costs being paid by third parties under traditional health plans, Herrick said patients rarely have a reason not to be wasteful with their health benefits. "We buy a lot more because we're not paying the bill," he said. "We have an incentive to consume more than we would otherwise."
Critics worry consumer-driven plans — because they significantly increase patient payments for services — may keep employees from seeking the medical care they need. There also is concern employees won't make better medical decisions.
Herrick, who was insured by a consumer-driven health plan for about three years, believes the worries are unfounded. "I took care of my health needs. But because I knew that money was mine, I didn't waste doctors' visits, and I used over-the-counter medicine when I could," he said. "I made it a point not to waste healthcare."
[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]
Friday, April 08, 2005
Mike Bond on HSAs
[Michael T. Bond, Mark E. Dobeck, and Deborah Erdos Knapp, "Using Health Savings Accounts to Provide Low-Cost Health Care," Compensation and Benefits Review, March/April 2005, Volume 37, No. 2.]
While those familiar with Michael Bond through The Flint Hills Center probably associate his name with Medicaid reforms, he is not surprisingly also an advocate for health savings accounts. Here is an excerpt from a recently released journal article of his on the subject:
The major impediment to this type of coverage in the past was that HSA funds were taxed when placed in the account. The new legislation eliminates this problem and makes this type of coverage more desirable and available to all non-Medicare individuals. Current research indicates that HSAs appear to lower costs, increase freedom of choice and produce better overall health outcomes. Note that the actual benefit of HSAs is likely to be higher because they are likely to have lower administrative costs than traditional coverage and they will “induce” less medical utilization by exposing consumers to the financial consequences of their actions.
[Michael Bond and Matthew Hisrich, "Medicaid Lessons From Former Communists," Wichita Independent Business Association Newsletter, February 2005.]
[Michael T. Bond, Mark E. Dobeck, and Deborah Erdos Knapp, "Using Health Savings Accounts to Provide Low-Cost Health Care," Compensation and Benefits Review, March/April 2005, Volume 37, No. 2.]
While those familiar with Michael Bond through The Flint Hills Center probably associate his name with Medicaid reforms, he is not surprisingly also an advocate for health savings accounts. Here is an excerpt from a recently released journal article of his on the subject:
The major impediment to this type of coverage in the past was that HSA funds were taxed when placed in the account. The new legislation eliminates this problem and makes this type of coverage more desirable and available to all non-Medicare individuals. Current research indicates that HSAs appear to lower costs, increase freedom of choice and produce better overall health outcomes. Note that the actual benefit of HSAs is likely to be higher because they are likely to have lower administrative costs than traditional coverage and they will “induce” less medical utilization by exposing consumers to the financial consequences of their actions.
[Michael Bond and Matthew Hisrich, "Medicaid Lessons From Former Communists," Wichita Independent Business Association Newsletter, February 2005.]
Thursday, April 07, 2005
Wall Street Journal: "Pregnant women are by necessity and ingenuity paving the way in what is called 'consumer driven' health care"
[Vanessa Fuhrmans, "Childbirth for Bargain-Hunters," The Wall Street Journal, 5 April 2005.]
There are those that argue individuals cannot shift the marketplace in health care due to a lack of knowledge of all of the huge amounts of data necessary to make educated decisions, or that health care is a "special case" and cannot be left to consumers alone. These arguments have existed for decades in all areas of the market, and ring no more true now than they ever have. In fact, they typify a defensive posture in the face of mounting evidence against them:
Expecting her third child this winter, Sandra Hughes became an unexpected pioneer in the new world of health care -- a world in which consumers have a direct stake in limiting their spending on treatment and tests.
Mrs. Hughes and her self-employed husband had health insurance, but couldn't get maternity coverage because of two previous Caesareans. So in nine months, Mrs. Hughes went from novice health-care consumer to hard-knuckled haggler. She negotiated discounts with doctors, convinced her obstetrician to match another's offer and wrote to the chief executive of a local hospital demanding a reason for refusing to meet her price.
Pregnant women are by necessity and ingenuity paving the way in what is called "consumer driven" health care. As companies boost premiums for family coverage -- and in some cases drop dependents altogether -- a growing group of women lack health coverage for pregnancy, one of the biggest medical costs they face. Others are in some type of consumer-driven high-deductible plan, with a Health Savings Account, that gives patients incentives to shop around.
As a result, these women are forced to navigate a murky system of health-care pricing and to make medical decisions based as much on checkbooks as maternal instinct. In the process, they are pushing doctors and hospitals to negotiate with them and challenging conventional billing and treatment practices.
Patients are learning how to make the complex medical billing system work in their favor. When Sandra Hughes in Florida reviewed a breakdown of what her previous insurer paid for her last pregnancy it showed her the rates were much lower than what the doctors and hospital charged so-called cash patients who pay out of pocket. When she asked for the same deal on her current pregnancy, one obstetrician complied. When she asked another doctor's practice to match it they did, cutting the usual $3,000 fee to $1,900.
When she tried the same with the hospital, she met resistance. Although her old insurer had paid $3,200 for her last Caesarean section there, Mease Dunedin Hospital in Dunedin, Fla., said its best price for a cash patient was $5,000. She says she wrote Jim Pfeiffer, president and chief executive of Mease Hospitals, demanding he justify the discrepancy. "By then, I was almost nine months pregnant, and I was angry!" she says.
Mr. Pfeiffer says he didn't receive the letter, but says the hospital's average cost for a Caesarean is actually $5,100, with a list price of about $10,200.
Since she already had negotiated deals with an anesthesiologist at Mease Dunedin and liked the care there before, she choose to remain at the hospital. But she says, "If more people asked about prices, it would all be far more transparent."
[Greg Scandlen, "Choice is revolutionizing health care," The Flint Hills Center, 28 September 2004.]
[Vanessa Fuhrmans, "Childbirth for Bargain-Hunters," The Wall Street Journal, 5 April 2005.]
There are those that argue individuals cannot shift the marketplace in health care due to a lack of knowledge of all of the huge amounts of data necessary to make educated decisions, or that health care is a "special case" and cannot be left to consumers alone. These arguments have existed for decades in all areas of the market, and ring no more true now than they ever have. In fact, they typify a defensive posture in the face of mounting evidence against them:
Expecting her third child this winter, Sandra Hughes became an unexpected pioneer in the new world of health care -- a world in which consumers have a direct stake in limiting their spending on treatment and tests.
Mrs. Hughes and her self-employed husband had health insurance, but couldn't get maternity coverage because of two previous Caesareans. So in nine months, Mrs. Hughes went from novice health-care consumer to hard-knuckled haggler. She negotiated discounts with doctors, convinced her obstetrician to match another's offer and wrote to the chief executive of a local hospital demanding a reason for refusing to meet her price.
Pregnant women are by necessity and ingenuity paving the way in what is called "consumer driven" health care. As companies boost premiums for family coverage -- and in some cases drop dependents altogether -- a growing group of women lack health coverage for pregnancy, one of the biggest medical costs they face. Others are in some type of consumer-driven high-deductible plan, with a Health Savings Account, that gives patients incentives to shop around.
As a result, these women are forced to navigate a murky system of health-care pricing and to make medical decisions based as much on checkbooks as maternal instinct. In the process, they are pushing doctors and hospitals to negotiate with them and challenging conventional billing and treatment practices.
Patients are learning how to make the complex medical billing system work in their favor. When Sandra Hughes in Florida reviewed a breakdown of what her previous insurer paid for her last pregnancy it showed her the rates were much lower than what the doctors and hospital charged so-called cash patients who pay out of pocket. When she asked for the same deal on her current pregnancy, one obstetrician complied. When she asked another doctor's practice to match it they did, cutting the usual $3,000 fee to $1,900.
When she tried the same with the hospital, she met resistance. Although her old insurer had paid $3,200 for her last Caesarean section there, Mease Dunedin Hospital in Dunedin, Fla., said its best price for a cash patient was $5,000. She says she wrote Jim Pfeiffer, president and chief executive of Mease Hospitals, demanding he justify the discrepancy. "By then, I was almost nine months pregnant, and I was angry!" she says.
Mr. Pfeiffer says he didn't receive the letter, but says the hospital's average cost for a Caesarean is actually $5,100, with a list price of about $10,200.
Since she already had negotiated deals with an anesthesiologist at Mease Dunedin and liked the care there before, she choose to remain at the hospital. But she says, "If more people asked about prices, it would all be far more transparent."
[Greg Scandlen, "Choice is revolutionizing health care," The Flint Hills Center, 28 September 2004.]
The left is right
[David Broder, "Fixing health care should be top priority," The Lawrence Journal-World, 7 April 2005.]
While those on the left tend to be associated with the polar opposite of consumer driven health care - universal coverage and socialized medicine - some advocates are correct in their analysis of the need to address health care prior to social security or other concerns:
[I]n a long span of years covering public affairs, I have come to value the contributions of the naysayers, those brave spirits who -- right or wrong -- challenge the conventional wisdom.
I had a visit from two of them this week, Dean Baker and David Rosnick of the liberal Center for Economic and Policy Research. Their skepticism attaches to the notion -- propounded by the Bush White House and accepted by most of the inhabitants of the political and journalism worlds -- that the Social Security system is in crisis.
Between 1980 and 2004, the growth in health care costs exceeded that of per capita gross domestic product by 12.6 percent. In just the next 10 years, that gap is projected to grow another 7.2 percent.
By either the CBO's or the Social Security trustees' estimates, the hit to the economy from runaway health care costs is far greater than the potential damage of a Social Security tax increase. The ratios range from four times as great to 18 times as great, depending on which estimates one chooses.
Baker and Rosnick suggest another way of making the same point. The tax increase needed to keep Social Security solvent for 75 years is of the same size as the likely growth in health care costs (above per capita gross domestic product) in the next 48 months.
The implication is obvious. "Politicians and commentators who claim to be concerned about the living standards of future generations of workers seem to be misdirecting their energy by focusing on the comparatively minor problem of Social Security," Baker and Rosnick write. "Clearly the inefficiency of the U.S. health care system poses a far larger and more immediate danger to the living standards of our children and grandchildren."
The next step is to agree on how to correct the problems in health care.
[Devon Herrick, "Health Savings Accounts: The Future Of Health Care For Kansans," The Flint Hills Center, 14 February 2005.]
Wednesday, April 06, 2005
States continue love affair with mandates
["Pressure Building at State Level to Compel Employers to Provide Health Insurance Coverage," Policy Brief, HR Policy Association, 25 March 2005.]
In sharp contrast with Consumer-Driven Health Care's emphasis on de-coupling insurance coverage from employers, many states are focusing on ways to encourage/force employers to provide coverage as their answer to the uninsured. Zeroing in on symptoms rather than the disease is a common problem for legislators, and this is no exception.
The good news is that while Colorado and especially Missouri make appearances in this new report, Kansas and its surrounding states are largely choosing to avoid additional mandates. Unfortunately, far too many mandates remain on the books, and instead of allowing for mandate-free policies or offering tax credits to uninsured individuals, Kansas legislators remain stuck in an old employer-based model. Substitute Senate Bill 257, for instance, extends tax credits to employers for offering HSAs, but provides no assistance to individuals.
To solve the problem of the uninsured, most federal policymakers are looking at the underlying problems in the system rather than requiring employers to provide health insurance. However, bills currently pending in 30 states demonstrate less patience at that level, where many state public assistance programs are facing severe budget constraints.
[T]he measures fall within three broad categories: 1) direct mandates; 2) indirect mandates conditioning state contracts and other benefits on health insurance coverage; and 3) public listings of employers who fail to provide health insurance coverage. As an example of the latter, the State of Massachusetts publishes the number of employees each employer has on Medicaid or SCHIP and the cost to the state.
This plethora of pending legislation—which does not offer workable, long-term solutions—underscores the importance of employers taking the offensive in developing workable solutions to the uninsured.
["Kansas Health Insurance Mandates Exceed National Average," The Flint Hills Center, 2005.
Matthew Hisrich, "State Mandates reduce insurance affordability," The Flint Hills Center, May 2004.]
["Pressure Building at State Level to Compel Employers to Provide Health Insurance Coverage," Policy Brief, HR Policy Association, 25 March 2005.]
In sharp contrast with Consumer-Driven Health Care's emphasis on de-coupling insurance coverage from employers, many states are focusing on ways to encourage/force employers to provide coverage as their answer to the uninsured. Zeroing in on symptoms rather than the disease is a common problem for legislators, and this is no exception.
The good news is that while Colorado and especially Missouri make appearances in this new report, Kansas and its surrounding states are largely choosing to avoid additional mandates. Unfortunately, far too many mandates remain on the books, and instead of allowing for mandate-free policies or offering tax credits to uninsured individuals, Kansas legislators remain stuck in an old employer-based model. Substitute Senate Bill 257, for instance, extends tax credits to employers for offering HSAs, but provides no assistance to individuals.
To solve the problem of the uninsured, most federal policymakers are looking at the underlying problems in the system rather than requiring employers to provide health insurance. However, bills currently pending in 30 states demonstrate less patience at that level, where many state public assistance programs are facing severe budget constraints.
[T]he measures fall within three broad categories: 1) direct mandates; 2) indirect mandates conditioning state contracts and other benefits on health insurance coverage; and 3) public listings of employers who fail to provide health insurance coverage. As an example of the latter, the State of Massachusetts publishes the number of employees each employer has on Medicaid or SCHIP and the cost to the state.
This plethora of pending legislation—which does not offer workable, long-term solutions—underscores the importance of employers taking the offensive in developing workable solutions to the uninsured.
["Kansas Health Insurance Mandates Exceed National Average," The Flint Hills Center, 2005.
Matthew Hisrich, "State Mandates reduce insurance affordability," The Flint Hills Center, May 2004.]
Pharmaceutical companies launch prescription assistance program
[Kevin Freking, "New drug program to aid uninsured," Associated Press, The Lawrence Journal-World, 6 April 2005.]
For those lacking prescription coverage a new tool is available that may ease the burden of drug costs. According to the website, the program provides access to more than 275 public and private patient assistance programs:
Drug manufacturers, under fire from consumer advocacy groups for opposing legislation to reduce prescription costs, announced Tuesday they would spend about $30 million through June to develop and promote a program that would help poor Americans gain access to the medicines they need.
Throughout the country, hundreds of public and private programs already provide some assistance to consumers who can't afford their prescriptions. But finding out about the programs and accessing them can be a daunting bureaucratic task for doctors, let alone consumers.
The new program establishes a Web site and calling centers to match consumers with the program that best suits their needs. The drug manufacturers' partnership is spending $10 million to promote the campaign. It took out full-page advertisements Tuesday in several large newspapers and also will air television ads.
In addition, more than $20 million will have been spent developing the program and running three call centers through the end of June, the program's organizers said.
[Kevin Freking, "New drug program to aid uninsured," Associated Press, The Lawrence Journal-World, 6 April 2005.]
For those lacking prescription coverage a new tool is available that may ease the burden of drug costs. According to the website, the program provides access to more than 275 public and private patient assistance programs:
Drug manufacturers, under fire from consumer advocacy groups for opposing legislation to reduce prescription costs, announced Tuesday they would spend about $30 million through June to develop and promote a program that would help poor Americans gain access to the medicines they need.
Throughout the country, hundreds of public and private programs already provide some assistance to consumers who can't afford their prescriptions. But finding out about the programs and accessing them can be a daunting bureaucratic task for doctors, let alone consumers.
The new program establishes a Web site and calling centers to match consumers with the program that best suits their needs. The drug manufacturers' partnership is spending $10 million to promote the campaign. It took out full-page advertisements Tuesday in several large newspapers and also will air television ads.
In addition, more than $20 million will have been spent developing the program and running three call centers through the end of June, the program's organizers said.
Tuesday, April 05, 2005
NCPA's John Goodman espouses new health care insurance concept
[Cheryl Hall, "Health insurance you take with you," The Dallas Morning News, 26 March 2005.]
Here is an interesting new idea from NCPA that encourages the break up of industrial-era employer-based coverage:
John Goodman, the father of health savings accounts, has embarked on another crusade. He wants a new form of corporate medical insurance that goes with employees who leave their jobs or get fired.
He calls it personal and portable health insurance. And he's pushing for legislation to make these individualized policies possible.
Dr. Goodman predicts an uphill battle with an industry that he sees as mired in old-line thinking.
His motivation?
The 58-year-old founder and president of the conservative think tank National Center for Policy Analysis in Dallas sees an alarming yet understandable phenomenon in corporate America. Companies are designing health plans that subtly encourage job applicants who need more health care to seek employment elsewhere.
He was in his mid-30s when he introduced a bold initiative called a medical savings account. In 1984, his concept was largely ignored. In 1990, only six congressmen agreed to give him an appointment to discuss it. In 2004, a federal law made Health Savings Accounts available.
He hopes to pull off a similar feat in much less time with portable health insurance, which marries group coverage cost savings with individual policy choices.
These plans would be similar to 401(k)s: Employers would set up and help fund them, but employees would own and keep the policies as they move through the labor market.
"When you go to work for an employer, you know how much the employer is going to contribute to health insurance each year and what extra portion you'll pay out of pocket to buy the type of insurance you want," Dr. Goodman explains. "Employers don't have to worry about who's sick and who's healthy. Employees don't have to worry about losing coverage if they lose their jobs."
College grads should consider HSAs
[Cheryl Powell, "College seniors need to get health insurance before they graduate and strike out on own," The Akron Beacon Journal, 5 April 2005.]
The realities of everyday life outside of college can come as a shock to recent graduates. Faced with the sudden necessities of finding a place to live and a job to pay the bills, other important items to take care of can be overlooked. Too often, one of those is health insurance. The emergence of health savings accounts may provide a way for new entrants in the workforce to obtain comprehensive coverage at a reasonable rate - and build up a sizable account in the process.
If you're getting ready to graduate from college, here's an assignment that can help you avoid major headaches down the road.
Figure out today whether you'll still have health insurance when you head out into the real world in the next month or two. If you won't, do a little research now to determine your best options.
In most cases, insurance provided through a parent's employer ends when children are out of school. Many insurance policies also cut off dependents when they turn a designated age, often 21 or 23, regardless of whether they're still in school.
College grads looking to keep premiums low should consider purchasing a plan with a high deductible, [Stan Sieniawski, president of InsureOne Benefits] said. (Deductibles are the amount you must pay on your own before insurance starts picking up the bills.)
You could save about 40 percent on your premium by selecting a plan with a $2,500 deductible instead of a $500 deductible, Sieniawski said.
"It's really an uphill, educational battle as it relates to getting people to realize they're actually spending more money premium-wise for benefits they're not using on a regular basis," he said.
[Cheryl Powell, "College seniors need to get health insurance before they graduate and strike out on own," The Akron Beacon Journal, 5 April 2005.]
The realities of everyday life outside of college can come as a shock to recent graduates. Faced with the sudden necessities of finding a place to live and a job to pay the bills, other important items to take care of can be overlooked. Too often, one of those is health insurance. The emergence of health savings accounts may provide a way for new entrants in the workforce to obtain comprehensive coverage at a reasonable rate - and build up a sizable account in the process.
If you're getting ready to graduate from college, here's an assignment that can help you avoid major headaches down the road.
Figure out today whether you'll still have health insurance when you head out into the real world in the next month or two. If you won't, do a little research now to determine your best options.
In most cases, insurance provided through a parent's employer ends when children are out of school. Many insurance policies also cut off dependents when they turn a designated age, often 21 or 23, regardless of whether they're still in school.
College grads looking to keep premiums low should consider purchasing a plan with a high deductible, [Stan Sieniawski, president of InsureOne Benefits] said. (Deductibles are the amount you must pay on your own before insurance starts picking up the bills.)
You could save about 40 percent on your premium by selecting a plan with a $2,500 deductible instead of a $500 deductible, Sieniawski said.
"It's really an uphill, educational battle as it relates to getting people to realize they're actually spending more money premium-wise for benefits they're not using on a regular basis," he said.
Monday, April 04, 2005
Consumer takeover in health care
[Scott Gottlieb, M.D., "Banks: The New HMOs," Forbes, 1 April 2005.]
The overwhelming changes that are likely to occur as consumers begin making more of their own health care decisions is highlighted in this recent Forbes article. As the author points out, the future of health care may have more to do with financial institutions than insurance companies:
A transformation is under way in health care that will displace the entrenched giants among the ranks of America's HMOs and pharmacy benefit managers. In their place will be millions of consumers linked by their financial services companies to accounts. These new accounts will allow them to manage their full range of medical benefits in the same fashion that they direct their 401(k)s.
The impetus for this change is a Trojan horse buried inside the new Medicare law. Explicit language in the new law enables a health plan and drug plan to be offered by any well-capitalized outfit adept at marketing and able to bare some financial risk.
If you think this describes a financial services company, not a health maintenance organization, then you are ready to glimpse the future of health care.
These drug plans will become active in 2006. So far, traditional health care companies such as HMOs have been scrambling to link up with traditional drug providers--pharmacy benefit managers, for example--to develop all the business relationships they'll need to structure, market and service a drug plan.
The real opportunities for a realignment in our health care system will occur when companies that have already mastered the business of providing retirement benefits to seniors get into the fray--namely, financial services giants like Fidelity, Vanguard, Citigroup and perhaps even Charles Schwab.
Considering the recent deal between pharmacy chain Walgreens and the HMO United Healthcare, in which the two giants joined forces to offer one of the new Medicare prescription drug plans, a collaboration between Walgreens and Fidelity Investments may not be unthinkable in the future.
Another feature buried in the new Medicare law is health savings accounts, which--similar to IRAs--allow investors to build tax-sheltered nest eggs to cover out-of-pocket medical costs.
The new accounts are linked to high-deductible health insurance plans. The accounts are designed in part to help consumers pay for health expenses until insurance benefits kick in. These accounts also put consumers, rather than HMO middlemen, in charge of managing health benefits. Many financial services giants such as Schwab already offer health savings accounts, and more firms will surely follow.
A drug plan can be piggybacked on top of the health savings account, turning firms like Fidelity or Schwab into one-stop shops for health care benefits, investment, savings and retirement needs.
With a health savings account and a drug plan to offer retirees, suddenly Citigroup, Fidelity and Vanguard begin to look a lot like a private substitute for our entitlement system. They would be able to combine retirement benefits in the form of 401(k)s with health benefits, which aren't subject to government budget cycles but rather are backed up by the real assets people have accumulated over a lifetime.
[William C. Short, "HSAs treat ills of health care payment system," The Business Journal of Kansas City, 25 March 2005.]
[Scott Gottlieb, M.D., "Banks: The New HMOs," Forbes, 1 April 2005.]
The overwhelming changes that are likely to occur as consumers begin making more of their own health care decisions is highlighted in this recent Forbes article. As the author points out, the future of health care may have more to do with financial institutions than insurance companies:
A transformation is under way in health care that will displace the entrenched giants among the ranks of America's HMOs and pharmacy benefit managers. In their place will be millions of consumers linked by their financial services companies to accounts. These new accounts will allow them to manage their full range of medical benefits in the same fashion that they direct their 401(k)s.
The impetus for this change is a Trojan horse buried inside the new Medicare law. Explicit language in the new law enables a health plan and drug plan to be offered by any well-capitalized outfit adept at marketing and able to bare some financial risk.
If you think this describes a financial services company, not a health maintenance organization, then you are ready to glimpse the future of health care.
These drug plans will become active in 2006. So far, traditional health care companies such as HMOs have been scrambling to link up with traditional drug providers--pharmacy benefit managers, for example--to develop all the business relationships they'll need to structure, market and service a drug plan.
The real opportunities for a realignment in our health care system will occur when companies that have already mastered the business of providing retirement benefits to seniors get into the fray--namely, financial services giants like Fidelity, Vanguard, Citigroup and perhaps even Charles Schwab.
Considering the recent deal between pharmacy chain Walgreens and the HMO United Healthcare, in which the two giants joined forces to offer one of the new Medicare prescription drug plans, a collaboration between Walgreens and Fidelity Investments may not be unthinkable in the future.
Another feature buried in the new Medicare law is health savings accounts, which--similar to IRAs--allow investors to build tax-sheltered nest eggs to cover out-of-pocket medical costs.
The new accounts are linked to high-deductible health insurance plans. The accounts are designed in part to help consumers pay for health expenses until insurance benefits kick in. These accounts also put consumers, rather than HMO middlemen, in charge of managing health benefits. Many financial services giants such as Schwab already offer health savings accounts, and more firms will surely follow.
A drug plan can be piggybacked on top of the health savings account, turning firms like Fidelity or Schwab into one-stop shops for health care benefits, investment, savings and retirement needs.
With a health savings account and a drug plan to offer retirees, suddenly Citigroup, Fidelity and Vanguard begin to look a lot like a private substitute for our entitlement system. They would be able to combine retirement benefits in the form of 401(k)s with health benefits, which aren't subject to government budget cycles but rather are backed up by the real assets people have accumulated over a lifetime.
[William C. Short, "HSAs treat ills of health care payment system," The Business Journal of Kansas City, 25 March 2005.]
Friday, April 01, 2005
Former AOL Chairman Steve Case to "Revolution"-ize health care
["Another Case Entirely," BusinessWeek, 11 April 2005.]
Steve Case is taking another big risk - this time he's taking on the health care industry and plans to work on bringing consumers the data they need to make informed decisions:
Stephen M. Case, the Internet Age icon who built America Online Inc. and then plunged into one of the most disastrous mergers of the century with Time Warner Inc., certainly didn't walk away from the company unscathed. But if he suffers any lingering anxieties about initiating the deal with Gerald M. Levin that eventually caused the stock to lose $135 billion in market value, fear of failure isn't one of them. He gave up his position as chairman in May, 2003, amid much recrimination and no small amount of frustration and disappointment. Many thought that someone whose empire had so dramatically imploded would, or should, live in self-imposed exile for a while. But Case, then only 44, was wealthy enough and ambitious enough to think he could start anew.
Within days of his departure, Case began talking with his former chief of staff, Donn M. Davis, about putting together a venture that would keep him a safe distance from the world in which his failures were still all too evident. Now, nearly two years later, Case has unveiled to BusinessWeek the details of his new company, Revolution, which he will officially launch on Apr. 4. Revolution is a private holding company that Case is funding with $500 million of his estimated $825 million fortune and that will invest in health care, wellness, and resorts.
Case will spend about half of that $500 million on companies that help patients take a more active role in their treatment. He is interested in those that provide online data about the price and quality of doctors and those that make available electronic medical records; he's considering everything from high-end personalized health coaching services to clinics housed in Target stores. As he says: "Health care is monumentally complex, confusing, inefficient, and inconvenient. Meanwhile it's the biggest industry in the country, and everybody hates it."
[Greg Scandlen, "Choice is revolutionizing health care," The Flint Hills Center, 28 September 2004.]
["Another Case Entirely," BusinessWeek, 11 April 2005.]
Steve Case is taking another big risk - this time he's taking on the health care industry and plans to work on bringing consumers the data they need to make informed decisions:
Stephen M. Case, the Internet Age icon who built America Online Inc. and then plunged into one of the most disastrous mergers of the century with Time Warner Inc., certainly didn't walk away from the company unscathed. But if he suffers any lingering anxieties about initiating the deal with Gerald M. Levin that eventually caused the stock to lose $135 billion in market value, fear of failure isn't one of them. He gave up his position as chairman in May, 2003, amid much recrimination and no small amount of frustration and disappointment. Many thought that someone whose empire had so dramatically imploded would, or should, live in self-imposed exile for a while. But Case, then only 44, was wealthy enough and ambitious enough to think he could start anew.
Within days of his departure, Case began talking with his former chief of staff, Donn M. Davis, about putting together a venture that would keep him a safe distance from the world in which his failures were still all too evident. Now, nearly two years later, Case has unveiled to BusinessWeek the details of his new company, Revolution, which he will officially launch on Apr. 4. Revolution is a private holding company that Case is funding with $500 million of his estimated $825 million fortune and that will invest in health care, wellness, and resorts.
Case will spend about half of that $500 million on companies that help patients take a more active role in their treatment. He is interested in those that provide online data about the price and quality of doctors and those that make available electronic medical records; he's considering everything from high-end personalized health coaching services to clinics housed in Target stores. As he says: "Health care is monumentally complex, confusing, inefficient, and inconvenient. Meanwhile it's the biggest industry in the country, and everybody hates it."
[Greg Scandlen, "Choice is revolutionizing health care," The Flint Hills Center, 28 September 2004.]
