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Monday, July 31, 2006

Does Kansas get its share of federal Medicaid funding? 

[Pamela Villarreal, "Federal Medicaid Funding Reform," NCPA Brief Analysis No. 566, 31 July 2006.]

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A new policy brief from NCPA breaks down federal Medicaid funding by state and compares those numbers to state poverty levels. As the analysis shows, Medicaid operates on a "rich get richer" model where wealthier states that spend more on Medicaid get more federal money in return. States like Kansas that receive less funding than would be the case if funding correlated with poverty levels reveal that a program meant to serve the truly poor may in fact be making a mockery of the concept:

Overall, 23 states received less than their share of the poverty population would merit, while 27 states received more. In fact, one-in-four federal Medicaid dollars (roughly $44 billion) would have been allocated to different states if funding was based on the poverty distribution alone.

The goal of Medicaid is to provide health care for the poor, but the federal government has made it into a “free-for-all” for states, rewarding those that spend the most. Bringing some common sense to the funding method would help contain spending growth by removing the incentive of states to spend more. It would also distribute federal funds for the poor more equitably.

- Federal funds could be allocated to states based on their poverty distribution; if a state has 10 percent of the nation’s poverty population, it would receive 10 percent of Medicaid funds.

- States could choose to cover optional populations with their own funds.

- Federal funding per poverty person could be capped, so that states do not have an incentive to spend more simply to receive more funds.

States should have the flexibility to use their federal funds as they choose. For instance, they could provide vouchers for Medicaid enrollees to purchase private health insurance, fund Health Savings Accounts or pay premiums for employer-provided insurance.

The goods news is that the Deficit Reduction Act of 2005 allows states to use their funds to experiment with Medicaid program modifications. But the matching formula needs to be changed as well. Distributing federal funds on the basis of need would help equalize Medicaid funding and encourage states to moderate their spending growth.


[Matthew Hisrich, "Kansas Medicaid Spending Comparisons," The Flint Hills Center, 20 August 2004.
Gregory L. Schneider, "Where the winds of reform go whipping cross the Plains," The Kansas City Kansan, 12 July 2006.]

Your health matters 

[Devon Herrick, "Medicine Can Be Consumer-Centric," Health Care News, The Heartland Institute, 1 August 2006.]

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NCPA's Devon Herrick reviews an important new book on U.S. health care in the latest issue of Health Care News:

"For far too long, the [health care] news has been dominated by myths and misconceptions, and truth has been buried," Gregory Dattilo and Dave Racer write in their new book, Your Health Matters: What You Need to Know about U.S. Health Care. The system, they note, is made up of a patchwork of public and private payers, which the authors point out many Americans find complex and confusing.

Yet we have a greater stake in how well our health care system functions than in any other industry, because "nothing else matters if life itself is threatened by illness or injury," they write. Therefore, the U.S. health care system, with its extensive safety net, reflects our willingness to do all within our power to extend life and alleviate pain and suffering.

In writing this book, the authors aim to crush health care myths, remove misconceptions, and make people aware that today's decisions will affect tomorrow's health care system. They begin by debunking the common misconception that the United States has a "health care crisis." There is no crisis of "care," say Dattilo and Racer; rather, the United States has a crisis of "cost."

Bit by bit, Dattilo and Racer identify the origins of the problems with the U.S. health care system. Before 1940, health insurance was almost unheard of, and patients paid most of their medical bills directly out of pocket. Today, slightly more than 10 percent of medical bills are paid directly, and many people consider health insurance coverage to be synonymous with health care.

Fortunately, the market can cure what ails U.S. health care, say the authors.

Doctors practicing under consumer-driven health care will interact with patients differently than those working under managed care. They will have to provide information, answer questions, and give options that fit patients' preferences, forcing medicine to become consumer-centric, say the authors.

To achieve this, however, will require a new mindset from patients, providers, and payers. For its part, government will have to stop interfering in the health care market with unnecessary and counterproductive mandates and regulations.


[Richard Warner, "Competing Visions of Medical Care," Kansas Medical Society Presidential installation speech, 5 May 2006.]

Friday, July 28, 2006

Telemedicine growing 

[Stephen Heuser, "'Telehealth' systems slowly gaining," The Boston Globe, 26 July 2006.]

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The Boston Globe
reports that cost-savings and convenience can be achieved at the same time thanks to improvements in technology:

For more than a decade, medical-device makers have trumpeted so-called "telehealth" hookups as a revolution in the costly American medical system. The idea is that by tracking vital signs remotely, doctors and nurses can keep patients comfortably at home while reserving their attention for the most serious cases. They can also save the expense and disruption of hospital visits by catching signs of trouble before a patient needs an ambulance.

Now an increasing number of companies have begun to compete for the home-monitor market. But hobbled by confusing technology and a Byzantine health insurance system that pays for nurses to check on patients in person but not from a distance, the idea has been slow to take off.

In perhaps the largest national rollout of such systems, the US Department of Veterans Affairs has spent $20 million to install some 15,000 monitors across the country, and expects to have 50,000 in place by 2009.

The VA has found the systems cut patient care costs by about one-third. Each trained nurse watches daily vital signs of about 150 patients, some of whom also have video monitors for personal consultations. Abnormal results are red-flagged so a patient can receive a phone call or a personal visit.

"This may seem a little bit fanciful, but it's a little bit like an air-traffic control system for patients," said Dr. Adam Darkins , who runs the VA's program.

Darkins also said patients don't seem to mind the drop-off in face-to-face visits.

"The satisfaction levels are over 90 percent," he said. "It's very intuitive, and they feel they're in regular contact."


[Devon Herrick, "Competition and creativity in health care," The Kansas City Kansan, 28 June 2006.]

Minimum wage hike would increase uninsured 

[John C. Goodman and Richard B. McKenzie, "Saving Health Insurance from the Minimum Wage," NCPA Brief Analysis No. 565, 28 July 2006.]

John Goodman and Richard McKenzie make an interesting point about health insurance in a new policy brief - not surprisingly, it turns out that politicians are overlooking a serious unintended consequence of the move to raise the minimum wage:

An unintended consequence of a minimum wage increase would likely be a rise in the number of Americans without health insurance. Congress can avoid adding to the ranks of the uninsured — in fact, it can make progress toward reducing their number — by giving employers and employees the option of using the amount of the minimum wage increase for health insurance in lieu of wages.

If there is an increase in the minimum wage, employers should be able to count their spending on health insurance for their employees — dollar for dollar — against the minimum wage increase. Specifically, all employers should be allowed to count up to $2.10 per hour per worker in health benefits toward meeting the minimum wage level. As a result, employers would not have to reduce health insurance benefits to meet the wage mandate.

Employees should also have the option of applying the minimum wage increase to their own expenses for health insurance. Employers who do not provide health insurance could set up a flexible spending account for employees at minimum cost. Employees could then use (potentially) taxable wage income to purchase nontaxed health insurance instead.

Market forces will largely neutralize the impact of a minimum wage increase, and the minimum-wage employee is unlikely to be much better off than before the increase. However, if the health insurance option is part of the legislation, it offers an opportunity to reduce rather than increase the number of Americans without health insurance.


[Matthew Hisrich, "The Uninsured in Kansas - A Closer Look," The Flint Hills Center, 28 July 2005.]

Thursday, July 27, 2006

HSAs: The triple advantage 

[Humberto Cruz, "Tax-advantaged health accounts can help you save on medical costs," The Boston Globe, 27 July 2006.]

Financial advisors and columnists around the country are continuing to recommend the money-saving benefits of health savings accounts - here's an excerpt from a recent article in The Boston Globe:

With insurance premiums rising more than three times faster than salaries, Americans "should be calculating and factoring life-long healthcare expenses into their overall financial planning," said Fidelity's Brad Kimler.

One tool is the health savings account.

"An HSA may not make sense for everyone, but the emerging trend is clearly toward coverage of catastrophic or major expenses rather than all expenses, and putting medical dollars in the hands of consumers to use how they see fit," said Mari Adam, a certified financial planner in Boca Raton, Fla., who has a health savings account. Adam, 48, figures she's saving $200 a month or more in premiums on her policy, and, based on her $1,800 deductible, can contribute $450 each quarter to her account.

"In essence, you are buying real health insurance rather than prepaying [through a higher premium] for medical services you might or might not need," said Vita Nelson, editor of the newsletter The Moneypaper.

"We call it the triple advantage: You put it in tax-free, it grows tax-free, and you pull it out tax-free," said Bob Hurley, vice president of eHealthInsurance.com, an insurance broker. Once you are 65, you can take the money out for any reason without penalties, although you will owe ordinary income tax.


[Devon Herrick, "Health Savings Accounts: The Future of Health Care for Kansans," The Flint Hills Center, 14 February 2005.]

Wednesday, July 26, 2006

CMS offers Kansas funding for Medicaid reform 

["CMS to fund state plans for transforming Medicaid to increase quality and lower costs," Press Release, The Centers for Medicare & Medicaid Services, 25 July 2006.]

The Centers for Medicare & Medicaid Services issued a statement recently announcing the agency's commitment to significant Medicaid reform in the states, and backing up that commitment with funding to encourage innovation:

States will receive $150 million over 2007 and 2008 to fund research and design of ways to transform their Medicaid systems, to the increase quality and efficiency of care, Mark B. McClellan, M.D., Ph.D., administrator of the Centers for Medicare & Medicaid Services announced today.

“These transformation grants express the core goal of the DRA to give states the kind of flexibility they need to deliver high quality care in an efficient and more economical way,” said Dr. McClellan. “With these grants states can streamline and modernize their systems, stabilize the growth of the program, and protect it into the future.”

Funds for the Medicaid “transformation grants” were authorized by the Deficit Reduction Act of 2005 (DRA) and are aimed at state adoption of innovative systems to get more value out of the money they spend providing healthcare to their citizens who are low-income elderly, children and people with disabilities.


A number of the areas of particular interest to CMS have been highlighted in recent Flint Hills Center publications, such as:

- Improving rates of collection from estates of amounts owed under Medicaid.

- Reducing waste, fraud, and abuse under Medicaid, such as reducing improper payment rates.

- Improving coordination of care through care management programs and other steps to prevent complications and duplicative or unnecessary services.

- Implementation of performance-based payment programs to provide rewards and support for high-quality care.

- Implementation of programs to promote personal control over services, with greater emphasis on prevention steps.


The money is there for the taking, but the deadline for the grant submission is fast approaching:

While the DRA set aside $75 million for each of 2007 and 2008, the grant fund solicitation will be for both years at one time. All states will be eligible for a grant and grant amounts will be variable dependent upon the number of states that apply.

No state matching funds are required for these special grants. States must submit applications by September 15, 2006. More information on the grants and how state Medicaid agencies can apply for them is on the CMS Web site at: www.cms.hhs.gov/MedicaidTransGrants.


[Michael Bond, "Reforming Medicaid in Kansas - A Market-Based Approach," The Flint Hills Center, 2 February 2006.
Roger Van Etten and Brian Vazquez, "Kansas Estate Recovery Primer," The Flint Hills Center, 22 September 2006.]

Retail health clinics drive innovation 

["The New Force in Walk-in Clinics," Daily Policy Digest, The National Center for Policy Analysis, 26 July 2006.]

The Wall Street Journal
reports that the growth in retail clinics by providers outside the traditional health care market is finally getting the attention of the health care industry, and forcing the industry to compete:

Staffed mainly by nurse practitioners who are licensed to treat a wide range of minor illnesses and prescribe medications, retail clinics have grown rapidly over the past five years as retailers, including CVS, Kroger, Wal-Mart Stores and Walgreen, have signed up with more than a half-dozen clinic operators.

Now, traditional medical providers are stepping up to the counter, driven by the threat of new competition, the opportunity to recruit new patients -- and real concerns about the quality of care.

- In southeastern New Jersey, for example, AtlantiCare, the region's largest health care system, will open its first in-store HealthRite clinic next month in a Somers Point, N.J., ShopRite supermarket; it's the first of seven initially planned, and the company may also franchise stores to other health systems.

- Geisinger Health System, of Danville, Pa., with hospitals, physician practices and other health services, is opening its first CareWorks Convenient Healthcare clinic in the Weis Markets grocery chain next month, and will open as many as 75 sites throughout the region in the next five years.

- Memorial Baptist Health system in South Bend, Ind., is operating Medpoint express centers in local Wal-Mart Super Centers.


[Devon Herrick, "The Changing Face of Health Care," The Salina Journal, 3 July 2006.]

Friday, July 21, 2006

Goodman on HSA detractors, Part II 

["CostRx: HSAs: A 'paternalistic device,'" United Press International, 20 July 2006.]

In the second half of UPI's interview with NCPA President John Goodman, he takes on standard union arguments against HSAs:

Q. Unions, particular the United Food and Commercial Workers, have not warmed up to the idea of the HSA. Jill Cashen, head of UFCW, recently said, "Expecting hourly wage workers to have to make good choices about healthcare is dangerous. People are going to choose not to get treatment because they don't think they need it or because they simply can't afford it" Any comment?

A. That's exactly the attitude of a person who thinks the average citizen cannot make good decisions about the important things in their lives, and (who) wants government or some bureaucracy to regulate where all their money goes. There's no evidence that people don't make good decisions. Of course, there will be cases when they don't, but on average, people tend to be self-interested and when they manage their own healthcare dollars, they manage to do a pretty good job of it.

Q. In criticizing HSAs, Cashen also said, "Putting the burden on the individual to make choices based on finance rather than real need is a losing proposition." How would you respond?

A. I don't think she understands healthcare. We just went through the whole problem with arthritic pain drugs (like) Vioxx and Bextra. It turns out that most people who were taking Vioxx shouldn't have, and the best predictor (of whether a patient would choose Vioxx) was if an insurance company was paying the bill. Well, what's the alternative to these prescription drugs, which not only are costly, by the way, but have these risky side effects?

The alternative is ibuprofen. Vioxx (had) cost about $800 a year more than ibuprofen for the arthritis patient. Drugs affect different people differently. How can any one of us make a decision for somebody else about whether the extra cost and risk is worth $800 a year? They can't. Those are exactly the decisions that people need to make on their own, and they need to be able to (benefit financially) when they make decisions that save money.

Q. You don't think a person might forgo needed treatment because the money has to come out of a limited savings account?

A. What are you calling "needed" treatment? How do I know that the person "needs" Vioxx or "needs" ibuprofen? Only that person can say how much relief he or she gets from the different pills and that has to be weighed against the money.

Q. But what if a person doesn't go to the emergency room when he or she needs to because there's not a health plan backing them up?

A. What we want is for the money to be there, so no one should not go to the emergency room because they can't pay the bill. But they should understand that (the emergency room) is an expensive way to get healthcare, so if they're going spend a thousand dollars in the emergency room, then they need to understand it ought to really be worth a thousand dollars. If it's something that can be put off until the next day, and for a tenth of that cost (at) the local clinic, then they shouldn't be in the emergency room.

We have all these studies that show that half of the people in the emergency room should never have been there in the first place. And half the people in a typical doctor's office don't need to be there. And there's no way we're going to solve these problems unless individual patients start managing their own money and start thinking about the alternatives.


[Gregory L. Schneider, "Competition and physician-patient relationship," The Kansas City Kansan, 14 June 2006.]

Thursday, July 20, 2006

Goodman on HSA detractors 

["CostRx: HSAs: A test of time?," United Press International, 19 July 2006.]

NCPA's John Goodman answers objections about the benefits of health savings accounts from The Commonwealth Fund in this recent interview:

Q. Cost-sharing is a cornerstone of the HSA, but a Commonwealth Fund study out this month showed that tax subsidies associated with HSAs would reduce cost-sharing for those who spend the most and for those who spend their least on healthcare, yet increase cost-sharing for the majority of people who fall into the mid-range of spending. So that the roughly 8 percent who account for about 50 percent of healthcare spending would see no change or a decline in cost-sharing. How do you respond?

A. In any one year, what (the survey) describes is correct, but people who are in the middle (of healthcare spending) are not going to stay in the middle; they're on their way to becoming better or they're on their way to getting worse, they don't tend to stay right in the middle. And so, over a number of years, it turns out that there are very few people whose out-of-pocket costs really go up with a conventional (HSA) plan.

Q. The study authors also said that cost-sharing would have to be raised substantially for the high spenders, but that might make healthcare unaffordable for those who need it most. Any comment?

A. The Commonwealth Fund has never liked this idea; they've been very slow to look at it. It sounds like they've discovered something that people in the business have known for years. (With HSAs), over, say five years, hardly anybody has an increase in out-of-pocket spending. So I think they are just wrong. You have to ask, over a period of years, what is the effect of this, and studies from South Africa (show that) hardly anybody loses in the long run. The(Rand Corporation studies) also show that over time, as people go through their healthy and sick stages, that almost everybody comes out ahead.


[Matthew Hisrich, "HSAs are increasing Americans' health coverage," The Topeka Capital Journal, 26 September 2004.]

Wednesday, July 19, 2006

Lawrence: Trans fat not a government priority 

[George Diepenbrock, "Ban on trans fats may not have a place at city’s tables," The Lawrence Journal-World, 19 July 2006.]

Almost as if in response to The Kansas Health Policy Authority's recent statements that the body would be focusing on improving the health choices of Kansans, public officials in Lawrence are saying that personal responsibility is not something they should impose:

Edward M. Burke, a longtime Chicago alderman, is pushing to prevent fast-food and national restaurant chains from using trans fats to cook their food.

But Lawrence city commissioners lack appetite for city regulation of trans fats in the restaurant industry.

“My sense is we have so many things on our plate that I don’t know there’s much interest,” Lawrence City Commissioner David Schauner said.

“Individual businesses will react to what the consumers want,” Schauner said. “If consumers want that product, I think it’s likely that will cause food retailers to change their product.”


Allowing businesses to respond to consumer demand is a wise move, especially given that the attention given to trans fats likely oversteps the health concerns involved. If policymakers are interested in encouraging residents to more closely monitor their health, a more productive first step would be to offer municipal employees health savings accounts.

[Jonathan Williams, "Please Don't Tax My Pringles," The Kansas City Kansan, 5 July 2006.]

Milton Friedman on health care 

["Free to Choose: A Conversation with Milton Friedman," Imprimis, July 2006.]

The latest issue of Hillsdale College's Imprimis features an interview of Milton Friedman by Hillsdale President Larry Arnn. The discussion includes some great insights by Friedman into the state of health care in the U.S.:

LA: Is there an area here in the United States in which we have not been as aggressive as we should in promoting property rights and free markets?

MF: Yes, in the field of medical care. We have a socialist-communist system of distributing medical care. Instead of letting people hire their own physicians and pay them, no one pays his or her own medical bills. Instead, there's a third party payment system. It is a communist system and it has a communist result. Despite this, we've had numerous miracles in medical science. From the discovery of penicillin, to new surgical techniques, to MRIs and CAT scans, the last 30 or 40 years have been a period of miraculous change in medical science. On the other hand, we've seen costs skyrocket. Nobody is happy: physicians don't like it, patients don't like it. Why? Because none of them are responsible for themselves. You no longer have a situation in which a patient chooses a physician, receives a service, gets charged, and pays for it. There is no direct relation between the patient and the physician. The physician is an employee of an insurance company or an employee of the government. Today, a third party pays the bills. As a result, no one who visits the doctor asks what the charge is going to be—somebody else is going to take care of that. The end result is third party payment and, worst of all, third party treatment.

LA: Following the recent expansion in prescription drug benefits and Medicare, what hope is there for a return to the free market in medical care?

MF: It does seem that markets are on the defensive, but there is hope. The expansion of drug benefits was accompanied by the introduction of health savings accounts—HSAs. That's the one hopeful sign in the medical area, because it's a step in the direction of making people responsible for themselves and for their own care. No one spends somebody else's money as carefully as he spends his own.


[Devon Herrick, "Competition and creativity in health care," The Kansas City Kansan, 28 June 2006.]

Tuesday, July 18, 2006

SEIU president declares end to employer-based health coverage 

[Andy Stern, "Horse and Buggy Health Coverage," The Wall Street Journal, 17 July 2006.]

It's not every day that the head of a major union writes a column in The Wall Street Journal, and definitely not sounding like Greg Scandlen:

"The employer-based system of health coverage is over" in the U.S., Andy Stern, president of the Service Employees International Union, writes in a Wall Street Journal opinion piece. According to Stern, U.S. residents "have to accept that we're living through the most profound transformative economic revolution in the history of the world" and are "rapidly moving from employer-managed work lives to self-managed work lives, in which workers must figure out on their own how to maintain things like health insurance and retirement."

This is similar to what Scandlen argued in "Choice is revolutionizing health care," an op-ed for The Flint Hills Center:

"There is a new world dawning. Employers, insurers and providers all will rethink the way they do business. As a result, the next 10 years likely will change our health care system forever, and for the better."

Scandlen further argues in his presentation "Consumer Driven Health Care: New Tools for a New Paradigm," that the employer-based model is a relic of the industrial era.

Of course, Scandlen does not take the leap that Stern does in saying that this means universal health coverage is the next obvious step. Sensing the upcoming shift away from employer-provided coverage, though, is a significant step for a union that has fought hard to gain health care coverage concessions from employers. Clearly, the health care coverage debate is shifting.

Steve Moses, Michael Bond in Kansas 

Stephen A. Moses of The Center for Long-Term Care Reform, Inc., and Medicaid expert Michael Bond, both adjunct scholars of The Flint Hills Center, are spending a good bit of this week in Kansas discussing Medicaid reform with key officials and stakeholders. Here's an excerpt from the update Steve just posted on his website about the trip:

The Center for Long-Term Care Reform has a longstanding relationship with the State of Kansas. A Kansas state legislator served on our predecessor organization's Board of Directors. Center president Steve Moses has testified before the state legislature three times over the years. Last year, he joined the Chairman of the Kansas House Appropriations Committee to present three "Legislative Long-Term Care Academies" across the length and breadth of the Sunflower State.

Since 2002, the Center has been invited three times to propose a project toward the goal of controlling Kansas's Medicaid long-term care costs while improving the program's access, quality and coverage.

[T]he current study will involve only one week of field work. Our focus will be on the status of and potential for the Deficit Reduction Act of 2005 instead of OBRA '93, HIPAA '96, and BBA '97.

Our "LTC Embed" reports from the state-level long-term care policy front in Kansas will fill in the details throughout the coming week. We expect to complete our report on long-term care service delivery and financing in Kansas within three weeks of finishing this week's field work. Stay tuned.


[Stephen A. Moses, "Project Proposal: Controlling Medicaid Long-Term Care Costs," The Flint Hills Center, January 2004.
Michael Bond, "Testimony before the November 2nd Meeting of the Kansas Medcaid Reform Committee," The Flint Hills Center, 2 November 2005.]

Monday, July 17, 2006

Motorcycle helmets won't save Medicaid 

[Dave Ranney, "Panel to promote Kansans’ well-being," The Lawrence Journal-World, 16 July 2006.]

The Kansas Health Policy Authority recently announced a shift in focus away from health care spending and toward personal responsibility:

If the Kansas Health Policy Authority has its way — and there’s a fair chance it will — you’ll soon be hearing more about staying healthy, less about health care.

“That is our mandate,” said Marcia Nielsen, the authority’s interim executive director.

The change marks a huge, though little publicized, shift in the state’s debate over how to care for the uninsured while keeping a lid on health care costs.

The possibilities include:

• Lower insurance premiums for state employees who don’t smoke, who are not overweight and who undergo health assessments.

• Co-pays for Medicaid recipients who smoke or are overweight.

• Advertising campaigns aimed at promoting good health.

• Requiring motorcyclists to wear helmets.


Such suggestions are not without merit, but merely scratch the surface when it comes to the fundamental overhaul the Kansas Medicaid program requires if it is to remain financially viable and provide quality care to its beneficiaries. While emphasizing personal responsibility is an important step, policymakers need to move beyond posting billboards reminding us to take our vitamins if real change is to take place in an otherwise broken program.

[Michael Bond, "Reforming Medicaid in Kansas: A Market-Based Approach," The Flint Hills Center, 2 February 2006.

Matthew Hisrich, "A Backgrounder on Kansas Medicaid," The Flint Hills Center, 19 July 2004.]

Friday, July 14, 2006

Michael Bond weighs in on "Romney Care" 

[Michael Bond, "Romney Care: Bad Medicine for Michigan?," The Mackinac Center for Public Policy, 14 July 2006.]

Flint Hills Center adjunct scholar Michael Bond argues in this recent column that Massachusetts’ new health care law is no model for other states to follow:

The Romney plan goes into effect in July 2007, and essentially mandates health insurance for every state resident, as long as coverage is provided through an employer or is available at a price the government declares "affordable."

If much of Romney Care sounds complex, contradictory and confusing, that’s because it is. The scheme is a mixture of many things, good and bad: A good-faith effort to solve a knotty societal problem; some innovative ideas; and a heavy dose of government mandates and interference in free markets. In some areas it is a solution looking for a problem, and in others it will make existing problems worse.


[Michael Bond, "Create a real Kansas Medicaid market," The Wichita Eagle, 10 February 2006.
Michael Bond and Matthew Hisrich, "Medicaid Lessons from Former Communists," The Wichita Independent Business Association Newsletter, February 2005.]

Thursday, July 13, 2006

UnitedHealth Group unveils new CDHC data 

["Three-Year Study Shows Consumer-Driven Health Plans Continue to Stimulate Positive Changes in Consumer Health Behavior," Press Release, UnitedHealth Group, 12 July 2006.]

A new three-year study provides dramatic data on the powerful impact consumer-driven health care is having on the health care sector:

- Preventive Care - In each of the three years, up to 5 percent more of the CDHP members sought preventive care services than did PPO enrollees.

- Acute Care - Individuals enrolled in a CDHP showed an annual reduction in the use of acute care services (22 percent fewer hospital admissions and 14 percent fewer emergency room visits) without adverse health effects or outcomes, while the relative utilization of those services actually increased year-over-year among PPO members.

- Chronically Ill - CDHP enrollees with a chronic illness also used acute services less (8 percent fewer hospital admissions and 12 percent fewer emergency room visits) but continued to visit their primary care physician at the same rate as chronically ill members enrolled in traditional plans.

- Overall Costs - Costs per member decreased 3 percent to 5 percent in the CDH plan over the 2004-2005 period, as compared to their 2003 baseline level, while increasing 8 percent to 10 percent among PPO participants (after adjusting for demographics, health status, plan design impact and geography).


[Greg Scandlen, "Choice is Revolutionizing Health Care," The Wichita Eagle, 28 September 2004.]

Thursday, July 06, 2006

New Flint Hills study tackles price transparency 

[Mary Katherine Stout and Matthew Hisrich, "Seeing Through the Cost of Health Care: Consumer-Driven Price Transparency in Kansas," The Flint Hills Center for Public Policy, 6 July 2006.]

The Flint Hills Center for Public Policy teams up with The Texas Public Policy Foundation to release a new policy paper evaluating the controversial issue of price transparency in health care. Read the news release here.

With recent legislative efforts in Kansas to impose the release of pricing information, this paper comes at a crucial time. As the paper argues, the solution to bringing health care pricing into the sunshine does not require the strong regulatory arm of government — the market itself will compel it.

Florida moves forward with Medicaid reform 

["Medicaid reform moves forward with $12M deal," South Florida Business Journal, 6 July 2006.]

The state of Florida took another step forward in its effort to increase competition and improve quality within its Medicaid program:

Affiliated Computer Services said it has signed a two-year, $12 million contract with Florida's Agency for Health Care Administration.

The Dallas-based health care program administration firm said the deal calls for it to provide choice counseling services in Florida's Medicaid reform.

Among other things, the reform plan calls for participants to choose their own health insurers, which are contracted through the state.


This pilot program is very similar to that proposed for Kansas by Michael Bond in his study for The Flint Hills Center:

[Michael Bond, "Reforming Medicaid in Kansas: A Market-Based Approach," The Flint Hills Center for Public Policy, 2 February 2006.]

Wednesday, July 05, 2006

GAO calls for greater Medicaid oversight 

["US GAO sees Medicaid claims oversight weakness," Reuters, 3 July 2006.]

As if in response to recent controversy in Kansas over state-level Medicaid claims abuse, a new GAO report questions whether the Centers for Medicare and Medicaid Services is currently up to the task of preventing fraud and abuse:

The federal agency responsible for overseeing Medicaid has failed to address some weaknesses in preventing reimbursement claims abuse, the General Accountability office said in a new study released on Monday.

The report urged CMS to create permanent funding specialist positions and to determine what technology it needs to further enhance its ability to analyze data.

It also said CMS still lacks processes to adjust oversight activities for changes in risk, and has not followed through on the GAO's 2002 recommendation that it incorporate the Medicaid Statistical Information System database into its oversight of state claims and its analysis capabilities.


[Matthew Hisrich, "Medicaid funding tricks raise questions," Kansas Health blog entry, 14 April, 2004.

[Matthew Hisrich, First Things First: Kansas Medicaid Must Get Its House In Order Before Expanding Home-based Care, The Flint Hills Center for Public Policy, 20 August 2004.
[Matthew Hisrich, Staying the Course: Medicaid Reform in Kansas, The Flint Hills Center for Public Policy, 31 January 2004.]

Monday, July 03, 2006

New HSA study released 

["HSAs and Account-Based Health Plans: An overview of preliminary research," America's Health Insurance Plans Center for Policy and Research, June 2006.]

A new AHIP study on the consumer-driven health care market features some great graphics that really show how much impact the growth in this area is having:

The number of HSAs is growing

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HSAs are not just for the young

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HSAs are making an impact on the uninsured

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[Kenneth Daniel, "Consumer directed health care growth," The Kansas City Kansan, 1 January 2006.
Brian Moore, "Governor's new HSA option leads to savings," The Kansas City Kansan, 14 December 2005.]

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