Healthcare links

How to Save Medicaid:

States can take three immediate actions to begin to address the Medicaid crisis and reign in skyrocketing health care costs:

1) Proactive detection and prevention of fraud, waste and abuse. Audits conducted by the Centers for Medicare and Medicaid Services have shown that Medicaid fee-for-service payment error rates approach 25 percent in some states. Any Medicaid system that makes an error one of four times is extremely vulnerable to fraud.

2) Move to pay-for-performance model. States that continue to use the fee-for-service model must convert to a payment model that rewards providers based on positive health outcomes versus just providing services.

3) Prioritize dollars. Difficult changes need to be made to the Medicaid system itself. Dollars allocated to programs such as graduate medical education and disproportionate share hospital payments should be converted to quality health care for individuals.

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Medicaid covers 48 million poor Americans with health insurance for children and non-disabled adults, and coverage for the disabled and long-term care. But states differ in who, what and how much is covered. California spends $969 per adult enrollee (2007) versus $5,108 in Alaska, and $3,473 per elderly person in Arizona versus $21,507 in Connecticut, according to the Kaiser Family Foundation.

States would jump at a proposal to allow more flexibility in Medicaid, though many will groan at any suggestion to cap the program’s open-ended federal matching grants.

We have reason to believe this suggestion will work. Two years ago Rhode Island got a Medicaid waiver giving it more flexibility, while capping the federal government’s share of the costs. The state claims its efforts have saved $150 million in 18 months.

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Some budget hawks and political leaders presume (or hope) that a lot of inefficiency can be wrung out of Medicaid, thereby saving taxpayers considerable amounts of money. There’s reason to be skeptical of such a presumption.

States have been squeezing savings out of Medicaid for years. One consequence is that state Medicaid programs already underpay health care providers of all types relative to costs, cutting beneficiaries off from those who are unwilling to accept such low levels of reimbursement. Thus, Medicaid prices can’t go much lower. Costs can’t be shifted to poor Medicaid beneficiaries either.

A Geneticist's Cancer Crusade: Dr. James Watson says the disease can be cured in his lifetime. He's 82.

'We should cure cancer," James Watson declares in a huff, and "we should have the courage to say that we can really do it." He adds a warning: "If we say we can't do it, we will create an atmosphere where we just let the FDA keep testing going so pitifully."

The man who discovered the double helix and gave birth to the field of modern genetics is now 82 years old. But he's not close to done with his life's work. He wants to win "the war on cancer," and thinks it can be won a whole lot faster than most cancer researchers or bureaucrats believe is possible.

Call it the last crusade of one of the nation's most indefatigable and productive scientists. In a long career, Dr. Watson was awarded the Nobel Prize in Physiology or Medicine (1962), garnered 36 honorary degrees and wrote 11 books, including the bestseller "The Double Helix" (1968), which recounts his dramatic quest with Francis Crick to determine the structure of DNA. He spent the early 1990s helping spearhead and direct the Human Genome Project to identify all human genes. And there's the 40 years he's devoted to transforming the Cold Spring Harbor Laboratory in Long Island, N.Y., from a ramshackle ruin into the elite cancer research institute it is today.

Feds Define Medical Costs:

What is a medical cost and what is an administrative cost?  It took the federal government 308 pages to answer that question in its interim regulations on Medical Loss Ratio(MLR). Why does anyone care? Because under the new health reform law insurers must spend 80% of your premium on medical expenses (85% for group plans). Fail to meet this standard and the insurers must give you a rebate.

Broker commissions are overhead; federal taxes are not.Presumably, money paid to fraudulent health care providers (who are never caught) are medical expenses. Activities to detect fraud are administrative expenses, but activities to recover fraudulent claims are not. Activities to boost quality can be excluded from overhead calculations unless they’re designed to detect fraud. “Those activities which are designed primarily to control or contain costs…” are not quality improving activities that can be excluded from administrative cost calculations. Clear as mud?

Theoretically the regulations were designed to protect consumers from excessive marketing costs and overly-generous executive pay. In reality, MLR caps will cause some plans to simply go away because they can never profitably meet the requirements. This includes inexpensive mini-med plans which have higher overhead (because benefits are capped). The new regulations give mini-meds a temporary waiver, however.

All told, 111 companies, unions and other organizations have received waivers in the past few weeks — suggesting that we have a major problem here. Washington is still in denial, however. Here is Nancy-Ann DeParle, explaining the minimum loss ratio rules: It’s all gain and no pain.

Does the U.S. Pay More and Get Less?

If you were to experience a hospital stay, would you want a private room? Cable TV? Gourmet choices on your dinner menu? A couch or second bed for a loved one? And would you insist on a doctor as your primary caregiver, rather than a nurse? 

Or would you be willing to give up these amenities in return for a less costly experience? 

What brings this to mind are some charts at Austin Frakt’s blog — showing international comparisons of the costs of common procedures. For example, the chart below suggests that we spend a lot more than other countries for normal baby delivery. In fact, we’re paying about two to three times the developed country average.