Are HSA participants denying themselves needed care in order to save money? The answer, as far as the state of Indiana and Mercer Consulting can find, is no. There is no evidence HSA members are more likely to defer needed care or common-sense preventive measures such as routine physicals or mammograms.

It turns out that, when someone is spending his own money alone for routine expenses, he is far more likely to ask the questions he would ask if purchasing any other good or service: "Is there a generic version of that drug?" "Didn't I take that same test just recently?" "Where can I get the colonoscopy at the best price?"

Labels: CO, HSA, IN, States

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In the three years since Massachusetts enacted its individual mandate, providers successfully lobbied to require 16 specific types of coverage under the mandate: prescription drugs, preventive care, diabetes self-management, drug-abuse treatment, early intervention for autism, hospice care, hormone replacement therapy, non-in-vitro fertility services, orthotics, prosthetics, telemedicine, testicular cancer, lay midwives, nurses, nurse practitioners and pediatric specialists.

The Massachusetts Legislature is considering more than 70 additional requirements.

Labels: Analysis, Insurance, MA, States

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Yesterday's allegedly "surprising" election of Republican populist Scott Brown to the Massachusetts Senate seat occupied by the late Ted Kennedy since 1962 -- a win which removes the 60-seat, filibuster-proof "super-majority" for Democrats in the U.S. Senate -- seems to worry the illiberal-regressive Democrats who've control Washington since 2006, while it heartens the religious-conservative Republicans who are now itching to regain control. Yet neither reaction is justified. America still treads a road to serfdom, with Democrats and Republicans alike paving the way. Brown is a mere speed-bump on this road, which will only slightly decelerate the speed of the journey.

Like Brown, today's religious-conservative Republicans don't in the least oppose socialized medicine -- only the speed, manner and cost by which it's ultimately adopted -- because they share with the illiberal-regressive Democrats a whole-hearted (and irrational) belief in altruism, the notion that it's moral and noble to sacrifice oneself and to serve. Emotional commitment to this virtue' of service necessarily leads -- however long it takes -- to serfdom in politics.

Labels: MA, OpEd, States

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Virginia Legislature Passes Ban on Insurance Mandate

The Virginia House of Delegates on Friday passed legislation intended to shield citizens from any federal requirement that they purchase health insurance. The bill goes to the governor for signing.

Labels: Insurance, States, VA

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Labels: Analysis, Free Market, States, VA

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Boulder's Congressman Jared Polis recently made national headlines when he and fellow first-term Congresswoman Chellie Pingree (D-Maine) teamed up to petition the U.S. Senate to include the so-called "public option" in its next version of health care legislation.

Polis' move was an attempt to break the political stalemate between the House and the Senate following Republican Scott Brown's upset election victory in Massachusetts. After Brown's election deprived Senate Democrats of the 60-vote supermajority necessary to pass the current version of ObamaCare, the House and Senate have struggled to bridge the differences between their respective versions of health legislation. In particular, one key difference has been the government-run "public plan" to compete with private insurance plans, which House liberals (including Polis) supported but which the Senate rejected.

Unfortunately, Polis' "public plan" is both bad policy and bad politics...

Labels: CO, OpEd, States

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...[C]onservative lawmakers in about half the states are forging ahead with constitutional amendments to ban government health insurance mandates.

The proposals would assert a state-based right for people to pay medical bills from their own pocketbooks and prohibit penalties against those who refuse to carry health insurance.

In many states, the proposals began as a backlash to Democratic health care plans pending in Congress. But instead of backing away after a Massachusetts election gave Senate Republicans the filibuster power to halt the health care legislation, many state lawmakers are ramping up their efforts with new enthusiasm....

Lawmakers in 34 states have filed or proposed amendments to their state constitutions or statutes rejecting health insurance mandates, according to the American Legislative Exchange Council, a nonprofit group that promotes limited government that is helping coordinate the efforts. Many of those proposals are targeted for the November ballot, assuring that health care remains a hot topic as hundreds of federal and state lawmakers face re-election.

Labels: CO, Insurance, States

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...Mr. Brown brazenly turned his Senate bid into a referendum on President Obama's health plan, and voters rewarded him with a job. Yet ObamaCare's model was the health reform inflicted on Massachusetts by a certain Republican governor in 2006, otherwise known as RomneyCare.

That precursor shares many elements of Washington's legislation, from an individual mandate, to employer taxes, to subsidized middle-class insurance. The program has bombed, creating giant costs while realizing minimal benefits. A big reason only 25% of Massachusetts voters strongly approve of ObamaCare is because of this experience.

The state plan has become a millstone for Mr. Romney, yet he has refused to disavow it. Had he campaigned with Mr. Brown he'd have undoubtedly been asked about it, and undoubtedly given an answer as unsatisfying as those to date.

...Mr. Romney has never backed away from his individual mandate, which requires people to buy insurance or pay a fine. Yet Republicans and independents despise the mandate, with many believing it is downright unconstitutional.

Mr. Romney's subsidized coverage is meanwhile doing what entitlements do: crowding out private insurers, compounding the cost explosion, walking the state toward rationing. So long as the former governor clings to these central points of his health plan, he's on the wrong side of free-market policy and public opinion.

That might be why in December Mr. Romney shifted again, saying his program differed significantly from ObamaCare in that it "solved" the "problem" at the state level, and featured no public option. But the public option argument has gone poof. And while GOP primary voters care about federalism, most will be hard pressed to parse the difference between a failed state program and a failed federal one.

The federal government may exercise only the powers granted to it or denied to the states. The states may do everything else. This is why, for example, states may have authority to require individuals to purchase health insurance but the federal government does not. It is also the reason states may require that individuals purchase car insurance before choosing to drive a car, but the federal government may not require all individuals to purchase health insurance.

Labels: Insurance, MA, States

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In 1993, New York adopted two of the most popular parts of the health care reform bill that recently passed the Senate: "guaranteed issue," or a rule that insurers must sell to anyone, regardless of pre-existing conditions; and "community rating," which prevents insurers from setting premiums based on characteristics like age and sex. (New York's reform is more radical than proposed federal reforms, as it allows no variance at all on age; the Senate bill would cap the amount of age-based difference).

New York did not require anybody to buy health insurance, nor did it give out subsidies to help people pay for it (though it did expand government-provided insurance at vast taxpayer expense.)

These reforms were supposed to make it possible for more people to get insurance coverage. Instead, what they did was drive premiums through the roof. Now, the cheapest insurance plan for a family in New York City costs $26,040, compared to a national average of around $13,000.

Unsurprisingly, few New Yorkers find these prices affordable, and the share of New Yorkers with individually-purchased coverage has fallen by 96%, to about 2 in 1000. Functionally, New York barely even has an individual insurance market anymore. As a result, New York's rate of uninsurance is in the middle of the pack nationally, even though the state ranks 4th in the share of residents on Medicaid.

New York experienced what is known as an "insurance death-spiral." Under community rating and guaranteed issue, healthy people found insurance premiums to be a bad deal and they dropped out. This increased the average risk among insureds, so premiums rose once more, again driving the healthier and poorer participants to drop. The process repeated itself until almost nobody found it worthwhile to buy their own insurance.

Labels: Insurance, NY, States

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California is poised to become the first state to set time limits for doctors to see patients, the Department of Managed Health Care said.

Regulations to be announced Wednesday require family practitioners in health maintenance organizations to see patients seeking an appointment within 10 business days. The deadline for specialists is 15 days.

Labels: CA, States

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In the aftermath of Scott Brown's stunning upset election victory in Massachusetts, pundits will be debating the meaning and political implications for weeks to come. However, one fact is incontrovertibly clear. The race hinged on the independent voters.

In Massachusetts, 50% of the registered voters are independent, as opposed to 37% Democratic and 12% Republican. In this week's election, independents voted overwhelmingly for Brown, giving him a 52-to-47% victory -- in a state where Barack Obama easily won 62% of the vote in 2008. This enormous swing shows that the independents represent a powerful political force that neither party can take for granted.

Independents are also the driving force behind the tea party rallies. Many tea party supporters have been quite explicit in warning that their opposition to the policies of our current Democratic president and Congress should not be mistaken as automatic support for the Republicans.

So what do the independents want? In a word, limited government...

Labels: MA, Misc, OpEd, States

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...This is the clarity that Obama has brought to the American political scene. To see a president’s clear and principled commitment to an ideology -- any ideology -- is precisely what America has needed for decades. This sight has helped many people understand the issues at a more fundamental level than they ever have.

Obama and his congressional allies have unwittingly launched a grass-roots movement that is actively questioning the role of government in our lives. Although a large portion of the protesters remains confused about the principles at stake, an increasing number are gaining clarity. They are coming to see the Democratic proposals for health-care "reform," for instance, not as a matter of new programs backed by good intentions, but as an attack on individual rights and an effort to impose a dictatorship -- as signs at tea parties attest. And many are beginning to see that the Republicans as well have been guilty of such attacks.

...Many Americans are now able to see Obama's plans as an assault on the founding principles of this nation. In addition, many Americans realize that time is running out -- that the future is here, today. These two factors are energizing otherwise nonpolitical Americans to literally rally around the flag, to confront their elected representatives, and to turn against the administration in droves.

Labels: MA, Misc, States

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As Obama Care becomes closer to reality, we in Colorado have the right to say "No." This is a chance for freedom loving people from across the state to come together and send the Colorado General assembly a simple message: Defend Colorado against Obama Care in the legislature, or we the people will do it at the ballot.

At the rally, we will be introducing language for a ballot initiative to amend the Colorado Constitution to excempt Colorado from Obama Care. We need to send a very strong and unified message to lawmakers that while we want them to say yes to defending Colorado, we are also ready, willing and able to move forward with the citizen initative process should the legislature fail us.

When: January 19th @ Noon
Where: West steps, Capitol building

...Jon Caldara and the Independence Institute moved Colorado another step toward its own brand of health care reform, filing with state officials a proposed amendment to the Colorado Bill of Rights called the "Right to health care choice."

...The amendment would forbid government from forcing individuals to buy private health insurance -- an attempt to counter proposed federal legislation. It would preserve the rights of individuals to pay cash for health care services, and it would uphold the right of Coloradans to buy health insurance plans from providers in other states.

The House and Senate versions of proposed federal health care reform would greatly restrict the rights of individuals to make their own health care decisions. The proposed amendment, if upheld by the courts, could make Colorado a unique enclave of health care freedom of choice.

Labels: CO, Misc, States

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...An expansion of Medicaid, subsidies for those with low income, an insurance exchange, a mandate for individuals to buy insurance -- all of these ideas that are core to Obamacare already passed in the Bay State a few years ago.

And, by all accounts, the experiment has been problematic. Yes, the total number of uninsured has dropped. But insurance premiums soared, boasting double-digit annual increases. The Boston Globe recently proclaimed that Massachusetts now has the highest insurance costs in the country.

Needless to say, state officials are at a loss -- and on the hook. Program spending is about 85 percent higher than originally projected. Recently discussed proposals include a return to managed care-like capitation and even price controls.

...As [Massachusetts officials] were implementing the plan, they insisted that basic health insurance cover countless services and offer wide subsidies. In other words, for a health system plagued by subsidies and regulations, officials decided to offer up more of the same.

Labels: MA, OpEd, States

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...First and foremost, our reforms were based on the faulty notion that health care is some sort of "right" which must be guaranteed by the government. Rights are not entitlements to goods or products that must be produced by another. There is no such thing as a right to a car, or a tonsillectomy. Instead, we have the right to be left alone and purchase as much or as little health-care as we choose.

Our state's current problem are the results of policy makers, bureaucrats, lobbyists, and insurers (a few of which are my opponents) violating this basic right and limiting our freedom to purchase what we want and from whom. Now, we are forced to choose from a limited set of insurance plans on terms set by Beacon Hill and special interest, rather than ourselves.

We should repeal all laws such as community rating and guaranteed issue, which have made Massachusetts' insurance rates amongst the highest in the country. Instead, our state should allow people to buy more affordable coverage that is available in other states. By allowing insurance companies to compete across state lines, this would immediately make the best offerings of all 50 states available to Massachusetts residents. This plan also has the potential to dramatically cut insurance expenses for many residents.

I also want to allow people to set up health savings accounts (HSAs) for routine expenses and purchase catastrophic-only insurance for major expenses. Under our current system, HSA-qualified plans are unaffordable and essentially illegal. These reforms would empower patients and lower costs by making patients not just the consumers, but paying customers of medical care and insurance.

Labels: Free Market, MA, States

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There's an election coming up in Massachusetts to replace Senator Ted Kennedy. Properly waged by the Republican, Scott Brown, it could become a perfect storm of the health care debate.

Sissy Willis proposes that it be made a referendum on the potential national catastrophe being masticated by Congress, with the latest milestone the corrupt passage of the Senate version as early coal in the nation's stocking on Christmas Eve. It has the potential to be a brilliant political move.

I believe that all Americans deserve health care coverage, but that we shouldn't have to create a new government insurance program to provide it. I support strengthening the existing private market system.

In Massachusetts, I support the 2006 healthcare law that expanded coverage, but I believe the Deval Patrick administration must do more to contain the costs of the Commonwealth Care subsidy program.

Labels: Analysis, MA, States

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Why is private health insurance so expensive? Blame Albany. First, state lawmakers have mandated that all health plans cover a host of procedures and "alternative-medicine" services, far more than companies in most states offer. Even the most stripped-down plan must include coverage of off-label drugs, surgical second opinions, and midwife and podiatrist services. Each mandated benefit makes the policy more expensive. Two state insurance regulations -- "guaranteed issue," which forces insurers to sell to any applicant, and "community rating," which requires them to offer the same price to everyone, regardless of age and health -- inflate prices further. Finally, the state has added billions of dollars in taxes and fees to private insurance policies, making them even pricier.

The perverse result: the young, healthy, and self-employed -- facing higher premiums for insurance that they seldom use, and realizing that they can always wait until they become ill to buy insurance -- tend to drop their coverage. (If New York regulated home insurance like this, you could buy a policy after your house had caught fire.) What's left is an insurance pool of older, sicker people, which drives private premiums higher still. Worse, the large number of uninsured people -- a consequence of Albany's bad policies—then becomes a justification for expanding the Medicaid rolls.

Labels: Insurance, Medicaid, NY, States

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...There are important lessons to be learned from recent experience with reform in Massachusetts. Here, insurance mandates similar to those proposed in the federal legislation succeeded in expanding coverage but—despite initial predictions -- increased total spending.

A "Special Commission on the Health Care Payment System" recently declared that the Massachusetts health-care payment system must be changed over the next five years, most likely to one involving "capitated" payments instead of the traditional fee-for-service system. Capitation means that newly created organizations of physicians and other health-care providers will be given limited dollars per patient for all of their care, allowing for shared savings if spending is below the targets. Unfortunately, the details of this massive change -- necessitated by skyrocketing costs and a desire to improve quality -- are completely unspecified by the commission, although a new Massachusetts state bureaucracy clearly will be required.

Labels: MA, States

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Suppose the mafia came to your town and forced everyone to purchase all their meals at mob-approved restaurants. The mafia would also select the menu items.

If you liked broccoli but their vegetable choice was spinach, then tough luck. Everyone would also have to purchase dessert, whether they wanted it or not. And if some customers couldn't afford the high-priced meals, the mafia would force you to "contribute" to cover their bills.

Most Americans would be outraged at such violations of their basic rights. But this is precisely what the president and Congress want to do with health insurance...

Labels: MA, OpEd, States

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Maine is the Charlie Brown of health care. The state's legislators have tried for decades to fix its system, but their efforts have always fallen short: health insurance premiums are still among the least affordable in the nation, health care spending per person is among the highest and hospital emergency rooms are among the most crowded. Indeed, many overhauls to the system have done little more than squeeze a balloon -- solving one problem while worsening another.

...Maine's history is a cautionary tale for national health reform. The state could never figure out how to slow the spiraling increase in medical costs, hobbling its efforts to offer more people insurance coverage. Many on Capitol Hill have criticized national reform legislation for similarly doing little to tame costs.

Labels: ME, States

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The Incentives Aren't to Help You

The proposed Massachusetts "global payment" system creates a tremendous incentive for physicians and hospitals to render as little care as possible ("Your Massachusetts Future," Review & Outlook, Oct. 14). If your care costs less than the annual allotment, then they keep the unused amount. If your care costs more, then the difference comes out of the providers' pockets. Such a system thus pits your doctor's interests against your own.

Suppose the state has already used up 85% of your annual allotment. You then see your doctor for a severe headache. He examines you and says, "No, you don't need a $1,000 MRI scan of your brain. Why don't you take two Tylenol and call me in the morning."

Would you be 100% sure that he's giving you unbiased medical advice?

And even if your doctor continues to conscientiously practice in your best interest, he must constantly battle hospital administrators seeking to reduce spending on your care.

Advocates of government-run health care like to claim that it is morally superior because it "doesn't put a price on human life." But when the government sets an annual spending cap for each patient, then that's exactly what it is doing. A government big enough to "guarantee" you health care will also be big enough to limit it.

Paul Hsieh, M.D.
Sedalia, Colo.

Labels: LTE, MA, States

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The details of Congress' health care "reform" legislation are finally coming into focus, and it's not a pretty picture. Congress is essentially proposing a national version of the failing Massachusetts system.

In 2006, Massachusetts adopted a health care plan which included an individual mandate requiring residents to purchase state-approved health insurance, new regulations on insurance companies specifying who they must cover and what benefits they must provide, and a government-subsidized "public option" for low-income residents. Supporters promised a utopia of "universal coverage" which would save money while improving quality of care. However, the exact opposite has occurred -- health costs in Massachusetts have skyrocketed, while patient care has suffered.

Before we adopt a similar plan at the national level, Americans should know three things about the Massachusetts plan...

1) Massachusetts' system of mandatory insurance drives up costs and violates individual rights.
2) "Coverage" is not the same as actual medical care.
3) The Massachusetts plan will end in rationing.

Labels: MA, OpEd, States

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Massachusetts is a problematic model on which to base federal health-care reform because the state relies heavily on Medicaid. Washington in 2008 agreed to provide the state with $10.6 billion over three years as part of its Medicaid waiver request, which allows the state to subsidize insurance for people with incomes higher than Medicaid rules normally allow.

Unlike Massachusetts, the federal government doesn't have a back-up source of funds to help it pay for national health care. Washington might want to see how Massachusetts does in solving these problems before proceeding with a similar model for the country.

Labels: MA, States

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...[T]he trade group for the nation's insurers, America's Health Insurance Plans, estimated that the average premium for family coverage in the individual market nationally was $5,800. But the study found wide disparities in costs, ranging from average premiums north of $12,000 in New York and Massachusetts to premiums costing on average only $3,000 to $5,000 in more than a dozen states. Some states have even allowed insurers to introduce low-cost, high-deductible policies that can cost under $1,000 a year.

It's fair to say that the costs imposed by some states based on how they regulate health insurance are now a bigger burden on individuals and small and mid-sized firms than state and local taxes.

...There's no evidence that states garner any benefit from such regulation and mandates. States with numerous mandates don't have healthier populations, for instance. Indeed, many state mandates are enacted for political reasons that have little to do with health care outcomes. Several years ago New York's then-Governor Pataki signed into law the state's hefty in vitro fertilization mandate as a payoff to conservative religious groups whose members favor big families and lobbied heavily for the law. It's a rather classic example of how, when you vest such power in lawmakers, some will eventually abuse it.

Labels: Insurance, MA, NJ, NY, States

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Controlling Massachusetts' soaring medical costs, many health care leaders believe, may require residents to give up their nearly unlimited freedom to go to any hospital and specialist they want.

..."You can't reap these savings without limiting patients' choices in some way," said Paul Levy, chief executive of Beth Israel Deaconess Medical Center.

...A state commission recommended in July that insurers largely scrap the current fee-for-service system -- in which insurers pay doctors, hospitals, and other providers a negotiated fee for each procedure and visit -- and instead pay providers a per-patient annual fee to cover all of the patient's medical care.

This new system of "global payments" would discourage overuse of expensive medical services, force providers to live within a budget, and improve coordination of care for patients, supporters argue.

Labels: MA, States

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My husband retired from IBM about a decade ago, and as we aren't old enough for Medicare we still buy our health insurance through the company. But IBM, with its typical courtesy, informed us recently that we will be fined by the state.

Why? Because Massachusetts requires every resident to have health insurance, and this year, without informing us directly, the state had changed the rules in a way that made our bare-bones policy no longer acceptable. Unless we ponied up for a pricier policy we neither need nor want -- or enrolled in a government-sponsored insurance plan -- we would have to pay $1,000 each year to the state.

...IBM seems like a rock of stability compared to the state of Massachusetts. It's apparent that state health-care policies can change at the whim of politicians in Boston, and we might not be able to adjust to the new rules. The way we figure it, if we sign up for a state-subsidized plan we will be at the mercy of the state.

So we are sticking with our plan and paying the tax. But what bothers me most is that a similar health-care mandate is being proposed in Washington, and some of the same promises that were made here are being made again -- such as that the mandate will never hit middle-class folks with a new tax.

Labels: MA, States

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New York - FAIL
Massachusetts - FAIL
Maine - FAIL
Tennessee - FAIL

Despite these state-level failures, President Barack Obama and congressional Democrats are pushing forward a slate of similar reforms. Unlike most high-school science fair participants, they seem unaware that the point of doing experiments is to identify what actually works. Instead, they've identified what doesn't -- and decided to do it again.

Labels: MA, ME, NY, OpEd, States, TN

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In his recent speech to Congress, President Obama could have promoted healthcare reforms that tapped the power of a truly free market to lower costs and improve access. Instead, he chose to offer a national version of the failing "Massachusetts plan" based on mandatory health insurance. This is a recipe for disaster.

Three years ago, Massachusetts adopted a plan requiring all residents to purchase health insurance, with state subsidies for lower-income residents. But rather than creating a utopia of high-quality affordable healthcare, the result has been the exact opposite -- skyrocketing costs, worsened access, and lower quality care...

Labels: MA, OpEd, States

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Democrats pretend that Republicans are just a bunch of obstructionists when it comes to health proposals. Meanwhile, Republicans debate minor aspects of Barack Obama's plan such as whether it subsidizes illegal immigrants and abortions.

The reality is that every key element of Obama's plan either came from Republicans or arose with Republican support...

Labels: Insurance, MA, OpEd, States

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In the three years since Massachusetts enacted its individual mandate, providers successfully lobbied to require 16 specific types of coverage under the mandate: prescription drugs, preventive care, diabetes self-management, drug-abuse treatment, early intervention for autism, hospice care, hormone replacement therapy, non-in-vitro fertility services, orthotics, prosthetics, telemedicine, testicular cancer, lay midwives, nurses, nurse practitioners and pediatric specialists.

The Massachusetts Legislature is considering more than 70 additional requirements.

...As goes choice, so goes quality. Statistics on waiting times for specialist care in Massachusetts read like a dispatch from Canada. In 2004, Boston already had the longest waits among metropolitan areas. By 2009, waits had generally shortened in other metro areas (average wait: less than three weeks) but lengthened in Boston (average wait: seven weeks), according to the Merritt Hawkins survey.

...Nevertheless, those costs are appearing in higher taxes and health insurance premiums. State officials have raised taxes on tobacco, hospitals, insurers and employers, as well as eliminated coverage for many legal immigrants just to scrape up their 20 percent share of the cost. They are also showing the nation where ObamaCare would ultimately lead: government-imposed rationing.

To cope with the cost of its reforms, Massachusetts created a legislative commission that has recommended moving the entire market to a single, Canadian-style payment system that would encourage doctors and hospitals to ration care.

Labels: MA, States

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...Then the state created a "public option" known as DirigoChoice. (Dirigo is the state motto, meaning "I Lead.") This plan would compete with private plans such as Blue Cross. To entice lower income Mainers to enroll, it offered taxpayer-subsidized premiums. The plan's original funding source was $50 million of federal stimulus money the state got in 2003. Over time, the plan was to be "paid for by savings in the health-care system." This is precisely the promise of ObamaCare. Maine saved by squeezing payments to hospitals and physicians.

The program flew off track fast. At its peak in 2006, only about 15,000 people had enrolled in the DirigoChoice program. That number has dropped to below 10,000, according to the state's own reporting. About two-thirds of those who enrolled already had insurance, which they dropped in favor of the public option and its subsidies. Instead of 128,000 uninsured in the program today, the actual number is just 3,400. Despite the giant expansions in Maine's Medicaid program and the new, subsidized public choice option, the number of uninsured in the state today is only slightly lower that in 2004 when the program began.

...This problem was exacerbated because since the early 1990s Maine has required insurers to adhere to community rating and guaranteed issue, which requires that insurers cover anyone who applies, regardless of their health condition and at a uniform premium. These rules—which are in the Obama plan—have relentlessly driven up insurance costs in Maine, especially for healthy people.

The Maine Heritage Policy Center, which has tracked the plan closely, points out that largely because of these insurance rules, a healthy male in Maine who is 30 and single pays a monthly premium of $762 in the individual market; next door in New Hampshire he pays $222 a month. The Granite State doesn't have community rating and guaranteed issue.

...Unlike the federal government, Maine has a balanced budget requirement. So out of fiscal necessity, the state has now capped the enrollment in the program and allowed no new entrants. Now there is a waiting list. DirigoChoice has become yet another expensive, failed experiment in government-run health care, alongside similar fiascoes in Massachusetts and Tennessee.

Labels: Insurance, ME, States

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1. Health insurance rates for small businesses and micro-businesses have increased by 50% in two years.

2. Massachusetts failed to enact any limits on trail attorneys, driving malpractice premiums higher, especially in high risk specialties like ob-gyn and surgery.

3. The number of individuals with taxpayer subsidized plans is growing year after year due to the ever increasing costs of health insurance.

4. Mandated coverage has not reduced the number of emergency room visits as predicted.

5. As the state keeps mandating more coverage by statute and regulation, individuals and businesses have very little flexibility in choice of health plans, and insurers have less choice in design of health plans.

6. The Massachusetts plan requires insurance companies to do more paperwork so that individuals can prove health insurance coverage on their taxes in order to avoid the fine.

7. The health insurance program is becoming a budget buster for the state.

8. The promise of lower insurance premiums as the number of uninsured declines is not true. As the insured population grows, so does the demand for medical services.

9. The Commonwealth is experiencing a growing shortage of primary care physicians as the newly insured (mostly on taxpayer subsidized plans) look for doctors.

10. The Massachusetts plan did nothing to address the problem of making health insurance more affordable other than providing a government option.

Labels: Analysis, MA, States

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Grand Junction in the Spotlight

It has been an unusually cold spring in Grand Junction, but hold onto your hats folks (not to mention your wallets) because it is about to snow in July.

Lil Ol' Grand Junction has popped up on the national scene in the current healthcare discussion. As a result, President Obama has been invited to visit Grand Junction as a shining example of how health care delivery should be done on a national scale and breathless local TV news reporters and members of the medical community are gushing. But in the excitement of being noticed by Washington some inconvenient facts are being ignored and other facts are being manipulated. Before we get too blinded by the spotlight of national attention that is about to hit, perhaps we should take a deep breath and regain a little perspective.

Why did Grand Junction's name pop to the surface? Here is the sequence of events. First, a large multi-year academic study was done at Dartmouth University (one of the lesser Ivy League schools) designed to look at regional variations in Medicare spending on health care. These results came out in April 2008. More recently Dr. Atul Gawande, an Ivy League surgeon, wrote an opinion piece or essay in the June 1 issue of The New Yorker magazine purportedly investigating why McAllen, TX has one of the nation’s highest levels of Medicare spending. Grand Junction’s name popped up in that article (alongside the Mayo Clinics) as one of the lowest spending regions. Next, this information came to the attention of one Barack Obama (an Ivy League graduate) who apparently is now using the Dartmouth study as a fulcrum to try to leverage advancement of the Democrat party’s health care proposal. Let me elaborate:

1. The Dartmouth Atlas: This study contains some intriguing data but is also being misrepresented in some ways. To briefly recap, the Dartmouth Atlas collected and analyzed data concerning the amount of Medicare dollars expended during the last two years of an individual’s life. They did this by the simple expedient of starting at the time of each person’s death and looking backward at Medicare records over a two year period. Patient expenditures were assigned to the primary hospital used during that two-year look back period and also to the city of residence at the time of death. Patients who were enrolled in a managed care plan were not included in the analysis. The data showed a wide range of variation between individual hospitals, cities and regions in the amount of dollars spent by Medicare in the last two years of a person’s life. For example, for inpatient hospital costs the values ranged from $13,706 (Dubuque, IA) to $51,917 (Manhattan) per deceased person. Grand Junction came in at $14,739 and was the lowest among 7 regions in Colorado while McAllen, TX came in at $33,729. What the data did not provide was an answer for why these differences exist. The data also did not show whether these differences in spending had anything whatsoever to do with the quality of the health care provided or any outcome other than death. The data did not indicate one way or the other whether the only outcome included in the study (death) happened earlier or later in hospitals that spent a lot or spent a little. All the data showed is that some hospitals spent more Medicare money than others. As such, this study should serve as a starting point for further research, not as a measure of how to model health care delivery for the nation as a whole.

Here's where you need to hang on to your wallet, because what is about to happen is that the Dartmouth Atlas will be touted as showing that some regions (Grand Junction will be held out as the shining example) are "more efficient" at delivering healthcare while saving money! This in turn will serve as the anvil upon which health care spending throughout the country will be hammered into line by a federally controlled healthcare system. In fact, the Dartmouth study reveals absolutely nothing about efficiency. Before that discussion can even begin, there must be some agreement on what constitutes 'efficiency'. That will require looking at end points other than death, and will include individual interpretations of value, quality and lifestyle. But those things are much more difficult to measure, so we are about to be treated to an example of using the wrong data to support the wrong argument for the wrong purposes.

2. Grand Junction: There are some aspects of Grand Junction that are unique in respect to this discussion. Grand Junction is relatively isolated geographically, with substantial mountain ranges separating it from the two closest metropolitan areas (Denver and Salt Lake City). The economy of Grand Junction primarily consists of agriculture and energy exploration and production. There is not a large union presence or much heavy industry. Small businesses abound. There is one large hospital (St. Mary's Hospital) and one small niche hospital (Community Hospital). St. Mary's has a fairly wide range of services while Community Hospital is more limited (e.g. no obstetric or newborn services, etc). There is one large regional insurance company, Rocky Mountain HMO. Grand Junction has a disproportionately high number of family practice physicians compared to larger metropolitan areas and a smaller number of specialists and even fewer subspecialists.

These are some of the reasons the current local framework works for Grand Junction:

-geographical isolation (G.J. is an inland island)
-fairly homogenous patient population
-homogenous range of physicians (FP predominating)
-good range of basic services, but limited range of specialty services
-sicker (i.e. more expensive) patients often are sent to Denver or Salt Lake City
-limited range of industry (i.e. the large corporate purchasers of health insurance)
-lack of a strong labor union presence (i.e. strong voice in benefits/coverage of plans)
-lack of competition for hospital services
-lack of competition for specialty/subspecialty services
-dominant local health insurance provider (HMO)

Those same reasons are exactly why the Grand Junction model will not serve well as a useful model for national health care. But that won’t stop some from trying to jam the ugly stepsister’s foot into Cinderella’s slipper (gratuitous fairy tale reference).


3. The Cost Conundrum -- What a Texas town can teach us about health care

By Dr. Atul Gawande
Here is an excerpt from Dr. Gawande's article:

The Mayo Clinic is not an aberration. One of the lowest-cost markets in the country is Grand Junction, Colorado, a community of a hundred and twenty thousand that nonetheless has achieved some of Medicare's highest quality-of-care scores.

Michael Pramenko is a family physician and a local medical leader there. Unlike doctors at the Mayo Clinic, he told me, those in Grand Junction get piecework fees from insurers. But years ago the doctors agreed among themselves to a system that paid them a similar fee whether they saw Medicare, Medicaid, or private-insurance patients, so that there would be little incentive to cherry-pick patients. They also agreed, at the behest of the main health plan in town, an H.M.O., to meet regularly on small peer-review committees to go over their patient charts together. They focussed on rooting out problems like poor prevention practices, unnecessary back operations, and unusual hospital-complication rates. Problems went down. Quality went up. Then, in 2004, the doctors' group and the local H.M.O. jointly created a regional information network—a community-wide electronic-record system that shared office notes, test results, and hospital data for patients across the area. Again, problems went down. Quality went up. And costs ended up lower than just about anywhere else in the United States.

Grand Junction's medical community was not following anyone else's recipe. But, like Mayo, it created what Elliott Fisher, of Dartmouth, calls an accountable-care organization. The leading doctors and the hospital system adopted measures to blunt harmful financial incentives, and they took collective responsibility for improving the sum total of patient care.

Keep in mind when reading this excerpt:

-"Grand Junction... has achieved some of Medicare's highest quality-of-care scores"

The Dartmouth data does not assess "quality of care". If he is referring to some other measures of quality he does not specify the source.

-"Problems went down. Quality went up."

There is no citation or data to support this comment other than an interview with Dr. Pramenko.

-"Then, in 2004, the doctors' group and the local H.M.O. jointly created a regional information network—a community-wide electronic-record system that shared office notes, test results, and hospital data for patients across the area. Again, problems went down. Quality went up. And costs ended up lower than just about anywhere else in the United States."

Once again, there are no data linking the creation of the regional information network with lowering of costs, decreased problems or increased quality. In fact, the Dartmouth data was collected from the beginning of 2001 to the end of 2005. The majority of the Dartmouth data therefore preceded the existence of the network (founded in 2004). In addition, since managed care Medicare patients were not included in the Dartmouth analysis, attributing any supposed savings to the HMO is dubious at best.

Dr. Gawande goes on to conclude that the reason for high expenditures in McAllen, TX is overutilization of medical services. Unfortunately, there is no definition of what constitutes "over-" or "under- utilization other than the cited dollar expenditures. Carried to its ridiculous extreme that would mean spending zero dollars would equal the "most efficient" strategy.

4. Having personally practiced medicine both in South Texas (San Antonio, just a couple hundred miles north of McAllen) and in Grand Junction, I can offer some perspective on the discrepancies between the two regions.

I can tell you from first-hand experience that there are huge differences in the collective mindsets of the medical community of South Texas when compared to the medical community of Western Colorado. Whether the differences reflect inherent cultural differences of either the general population or the doctors, historical evolution of medical services in the respective areas, demographic pressures, or some other factors I cannot say. I would not, however, be going too far out on a limb to say that corruption is rampant in South Texas. The mindset I saw when I lived there was one of "bill as much as you can get away with and then bill some more". Medicaid fraud was an everyday occurrence if not a way of life and diagnostic testing was used indiscriminately as a revenue source.

The mindset in Grand Junction has more typically been one of primary care, prevention and less utilization of diagnostic testing and subspecialty services. While it is safe to say that McAllen "overutilizes" it could be equally valid to say that Grand Junction "underutilizes".

5. It is reasonable and probably important to wonder why there are local and regional variations in health care spending. For now however, the available data raise interesting points of speculation rather than providing any answers. One could even make the case that regional variation in spending is not inherently a bad thing. We seem to be continuing to experiment on various ways of delivering health care. What works for Grand Junction will probably not work for Los Angeles or McAllen, TX.

Almost certainly a "one size fits all" nationalized approach will be untenable. Dr. Gawande acknowledges this to an extent when he calls for rewarding doctors and hospitals that unite into "accountable-care organizations, in which doctors collaborate to increase prevention and the quality of care, while discouraging overtreatment, undertreatment, and sheer profiteering."

Health care is, like any other commodity, finite in its supply. When you get right down to it, the entire health care debate can be conceived of as wrestling with the question of how to distribute a finite number of dollars for the purchase of health care services for a diverse population of 300 million. The only way to do that is by allocating expenditures or resources, or in other words, the dreaded "R"-word... rationing. Like it or not, rationing is at the core of every single healthcare reform proposal under consideration. Every entity that has a hand in the pie is trying with all their might to hang onto their piece and maybe get a little bit of someone else’s while those who seek to control the system are trying to fairly divide the pie.

Free market advocates believe that individuals making decisions in their own rational self interest, using the fruits of their own labor will collectively make wise decisions that will result in an inherent balance or "fairness" of the system. Those who value a given product or service more will choose rationally to spend more of their own money to purchase that product or service. Those who don't value a given product or service can choose to buy a boat or ATV instead. On the other hand, advocates of nationalized healthcare (including the current Congress and Administration) believe that a centralized government agency or oversight committee can efficiently collect individual wealth from a segment of society, pool that money for the purchase of health care goods and services for "all" and micromanage the delivery of these multitudinous goods and services and allocate resources effectively and fairly from Washington, D.C.

The questions you should be asking are these: Who will be making the rationing decisions and will those decisions be in your best interest? How is quality defined and how is it measured? What outcomes are measured and how accurately can they be measured? Does the raw data actually support the claims that are being made? Who gets to decide how much money gets spent on your health care during the last two years of your life, or the last five years of your life or any other arbitrary length of time?

We can only hope that what is good about the local medical system does not get swallowed up by a voracious federal juggernaut or glossed over in a meaningless sound bite. Is Grand Junction really a shining example of how to run health care or are we just giddy that a national celebrity might come to visit? Is that bright light the spotlight of a grateful nation or the headlight of an onrushing federal healthcare train barreling down the tracks directly at us? Listen carefully and critically to what is said. Take time to educate yourself. Speak up among your family, friends, community leaders and legislative representatives and let them know where you stand. And finally, wear your mittens and a sweater, Grand Junction, for the snow job is about to begin.


James K. Schroeder, MD

Dr. Schroeder is a practicing Pediatric Cardiologist currently living and working in Grand Junction. He has previously practiced medicine in the military for 13 years and in San Antonio, TX for 8 years. He attended high school in the Palisade High School right here in the Grand Valley. He attended college at West Point and the University of Colorado and medical school at Tulane University in New Orleans. Dr. Schroeder cares deeply about the future of his profession and the future his grandchildren will inhabit.

Labels: Analysis, CO, States

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Massachusetts, Model for Universal Health Care, Sees Ups and Downs in Policy

...The difficulties in receiving care were severest among low-income residents, who have gained the most from expanded access under the state's law, passed in 2006. It requires most residents to have health insurance and provides state-subsidized plans for the poor. Massachusetts now has the country’s lowest percentage of the uninsured -- 2.6 percent, compared with a national average of 15 percent.

But the study, which was scheduled for publication Thursday in the journal Health Affairs, found that increased demand for care from the newly insured was confronting an insufficient supply of willing physicians. One in five adults said they had been told in the last 12 months that a doctor or clinic was not accepting new patients or would not see patients with their type of insurance. The rejection rates for low-income adults and those with public insurance were double the rates for higher-income residents and those with private coverage.

Labels: MA, States

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State seeks to revamp way doctors, hospitals are paid

...Commission [Special Commission on the Health Care Payment System] members said they will urge Governor Deval Patrick and the Legislature to replace the current system, in which insurers typically pay doctors and hospitals a negotiated fee for each individual procedure or visit, with a set payment for each patient that covers all that person's care for an entire year.

Massachusetts would be the first state to broadly adopt such a system, which would essentially put doctors and hospitals on a budget in an effort to restrain health spending.

A single, yearly fee is intended to discourage doctors and hospitals from providing unneeded tests and treatments, so patients could find it harder to get procedures of questionable benefit. And because doctors and hospitals would have to work together more closely to manage the budget, the hope is they will better coordinate care for patients, which could improve quality.

Patients' care would be compromised

Adopting a system to pay doctors and hospitals a single, yearly fee for each patient is neither bold nor experimental. It's just another variation of capitation: a system that would lead to the government rationing and ultimately compromising patient care.

Before making another costly healthcare mistake, Beacon Hill lawmakers should ask themselves how they would react if their doctor said, "We've already spent your annual healthcare allowance, and anything else we could do to treat your condition would put us deeper in the red." My guess is that it would only take one really sick lawmaker (or governor) to realize the error of their ways.

Scott Keays
Allston

Labels: LTE, MA, States

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