Last week's post about what will happen if we don't have health reform got me (and a couple others) thinking about the downstream impact - on employers, manufacturers, taxpayers.

Before we delve into the impacts, a bit of clarification.

My statement that a family policy would cost $30,000 in 2016 was based on the latest info from two large consulting firms about commercial health insurance premiums - rates are going up more than ten percent next year. And it is highly likely they will continue to accelerate at or near the ten percent number. Two commenters noted that just because something happened in the past does not mean it will continue into the future - I'd respectfully note that while that is true in the abstract, in the concrete world of health insurance, there's a very high likelihood that costs will indeed go up ten percent - or more - per year for the foreseeable future absent meaningful cost reform.

The AON survey reports trend rates ranged from 16.0% and 18.2% for HMo, PPO, Indemnity plans in 2002, 15.7% - 17.2% in 2003, 14.1% - 15.3% in 04, 12.7% (CDHP) to 14.6% in 05, 11.9% - 14.4% in 2006, 10.7% - 12.7% in 2007, and 10.5 - 12.4% in 2008.

The past is a pretty good predictor of the future; over the last eight years cost have consistently increased more than ten percent each year, with most increases well above that level. Whether we are at the bottom of the cycle or cost inflation rates will continue to decrease is unclear, but what is clear is that the inflation rate will head back up at some point in the next few years.

Back to the real world impact.

• If nothing changes, the share of the nation's budget paid by the government will be greater than that paid thru private insurers.
• 178,000 small business jobs will be lost by 2018 as a result of health care costs
• If employee contributions stay at their current level (about 30% of premiums), workers will be paying $9000 per year, or $750 per month, towards their health coverage - not including deductible, copays, coinsurance, and services not covered
• General Motors' health insurance will add about $3000 to the cost of each vehicle - if it is still in business>li>In my hometown of Madison, Conn., Town employee health insurance costs are paid for with property taxes; without reform the amount of tax revenue needed to pay those bills will double by 2016, forcing tax increases and/or significant service cuts
• More Americans will have to rely on the kindness of others for their health care
• Because 65 million of us will be without health insurance

Unlike the distortions, misrepresentations, and outright lies being spread by McCaughey, Limbaugh, Palin et al, this is the real deal. So fight against reform if you wish, but don't complain later when you can't afford insurance, your employer can't afford insurance, your taxes are going up to pay for teachers' benefits, and our economy is sinking under the weight of health care costs.

(Note - as I said Friday, health 'reform' must include cost control, something neither party has bothered to meaningfully address)

Posted by at 10:37 AM | Permalink | Comments (4)

The reports from consulting firms Segal and Aon that health benefit costs will jump more than ten percent next year shows exactly what we're in for if reform efforts fail.

And by 'reform' I mean reform with strong cost controls.

When costs increase ten percent a year, they double every seven years. With current family premiums in the $15,000 range, employers and employees will be paying $30,000 per family in 2016. And that's not including deductibles and copays, which are sure to rise.

If you're relying on so-called consumer-directed health plans to stem the tide, good luck - their costs went up two points more than 'regular' HMO and PPO plans. Industry veterans aren't surprised, as new insurance products almost always have good experience in the first couple years and as the block 'ages', claims creep up. As I've noted previously, CDHPs are not a panacea, in fact they may well drive up costs due to delayed care. (That said, with substantial changes CDHPs could be a valuable tool in cost containment.)

Eventually the US will reform its health insurance and health care delivery 'systems'. Unfortunately I don't see it happening this year due to the failure of the Democrats to put forth a program that controls costs, make a cogent argument and control the debate, and the decision by the Republicans to remain nothing more than the 'Party of No'.

But when something can no longer continue, it won't. When enough Americans lose their coverage, when cost-shifting gets to the point where those left with insurance are paying thousands in premiums to cover those without, when local taxes to pay for teachers' and police benefits get so high that folks are losing their houses, when Medicare finally goes insolvent, when hospitals are collapsing due to the cost of indigent care, when big pharma and device companies are no longer making the gazillions they so richly deserve, then, and only then, will the screaming hordes at Town Hall meetings decide that any health care coverage is better than none.

What happens then?

Well, we may end up with single payer, or Medicare for All, or some version of the German or Swiss or French systems. The false patriots championing freedom and the American tradition of independence and all that other hooey will find themselves drowned out by the moms and dads desperate for insurance to cover their kids and parents.

While the opponents of reform may well win this battle, in the long run they will lose the war. Their best chance (which some seem to have recognized, albeit half-heartedly) is to engage now, get the best deal they can, and retool their business models to prosper without relying primarily on risk selection and underwriting to avoid unhealthy members.

What does this mean for you?

If you are an investor, look closely at the chronic care solutions offered by health insurers - the ones who are investing heavily will be the long term winners.

Posted by at 9:28 AM | Permalink | Comments (6)

My post yesterday about the coming changes to the AWP pricing formula for drugs included the statement

Understandably, the pharmacies, both independents and chains, are asking the big PBMs to change their contracts to account for the change by reimbursing the pharmacies a few points higher then their current rate.

Word is the big PBMs - Medco, Express - have politely declined.

The second sentence is wrong. Sources indicate the pharmacy chains/independents and the big PBMs are working thru the issue, or have already agreed to terms intended to preserve "cost neutrality" for the pharmacies.

I don't have all the details on this yet, but wanted to correct my mistake as quickly as possible. More information to follow...

I apologize for the error.

Posted by at 5:01 PM | Permalink

After this spring's ugly display of ignorance in the form of public pillorying of undeserving AIG personnel, what happened to AIG?

Well, hard as it is to believe, mostly good stuff. There was a big push to sell assets in the spring, a push that, for very good reason, didn't result in many sales. That's a good thing, as buyers were looking for fire-sale prices, and for a while it looked like the Feds were eager to dump as much of AIG as possible regardless of the financial consequences. It's our good fortune the sales didn't happen then.

To date the company has sold off assets amounting to about $8 billion, while also reporting solid financial results for the last quarter - and in anybody's book, $1.8 billion is pretty solid.

The company that brought down the giant, AIG Financial Products, is slowly being unwound, with credit derivative exposure reduced by some seventeen percent since January 1 of this year - but it's still $1.3 trillion.

And the new CEO promises that taxpayers will be reimbursed, and AIG will arise again. At least the stock markets took heart, pushing the company's value up some 30% on the strength of not much more then Benmosche's cheerleading.

Earlier this year, AIG sold auto insurer 21st Century to Zurich's Farmer's division for $1.9 billion, got a quarter-billion dollars for AIG Private Bank Ltd. and $680 million for AICredit, while netting $1.1 billion from the public offering of shares in reinsurer Transatlantic Holdings Inc.

Still on the books are American International Assurance Co. (valued at $25 billion) and American Life Insurance Co., ($18 billion) and Chartis' book value is about $38 billion. And according to Reuters, AIG's Taiwan life unit Nan Shan Life "could attract a bid of about $2 billion", and AIG is in talks to sell two Japanese life insurers, AIG Edison Life Insurance Co and AIG Star Life Insurance.

One of the pricier assets still on the block is airplane owner International Lease Finance Corp, which has been valued anywhere from $2.5 to $8 billion. The tight credit markets appear to be the obstacle to a deal for now.

Against those assets, AIG owes the taxpayers about $88 billion as of June 30, 2009.

Meanwhile, the core insurance business has a new name - Chartis - and a bit of a new attitude. The Chartis folks I've spoken with are happy to be out, away and on their own, without the derivative mess looming over them like the merchant of death. There are still lots of hard feelings, but less handwringing and more of a 'we've got work to do' attitude. And internally they are getting the work done, making progress on a number of fronts particularly in underwriting and claims.

I'd expect to see Chartis go to an IPO in the next couple of years, after the credit markets loosen up and valuations start to climb. While taxpayers may not get all of our money back, a little patience and a lot of hard work on the part of AIG folk past and current may minimize the damage.

Here's hoping that those same politicians who insulted, degraded, denigrated, and verbally assaulted AIG execs back in the spring are adult enough to commend these folks if and when they deserve it.

Holding your breath?

Posted by at 6:38 AM | Permalink

On September 26, 2009, First DataBank and MediSpan, the firms that publishe Average Wholesale Pricing tables is changing its methodology. This change will reduce the AWP amount by almost four percent.

So what you say?

Here's what.

Pharmacies will now be reimbursed at a lower amount for each script filled. With margins on most drugs thin already, this change will push many near to breakeven. Recall that AWP affects retail pricing, not the price paid by pharmacies to manufacturers and their intermediaries.

Understandably, the pharmacies, both independents and chains, are asking the big PBMs to change their contracts to account for the change by reimbursing the pharmacies a few points higher then their current rate.

Word is the big PBMs - Medco, Express - have politely declined. CORRECTION - this statement is incorrect. The big PBMs are in fact negotiating with the retail pharmacies to reach an agreement.

No word on how Caremark is addressing this; as they are owned by the second largest pharmacy chain (CVS) they may well be thinking a little differently about the issue.

In the much smaller work comp world (about $4 billion in annual Rx spend), things aren't quite as clear. Many payers apparently still think the change isn't going to happen for another two years (which is when the legal settlement required it), but the publishers were required to make the change within 180 days of the settlement - which means the changes are effective in precisely one month. Regardless, expect there to be quite a bit of discussion amongst PBMs, their customers, and pharmacies over the next thirty days as all try to figure out how to deal with the change while maintaining decent relationships with each other.

I would note that regulators in several of the larger states don't appear to be interested in making any changes to their fee schedules or reimbursement rules to address the change.

More to follow...

Posted by at 2:28 PM | Permalink

My firm, Health Strategy Associates, has conducted a survey of prescription drug management each year for the last five. I'm well into the survey portion of the Sixth Annual Survey, and here are some preliminary findings.

1. Drug cost inflation appears to show signs of rebounding after five years of decreases in the rate of increase. The data is by no means complete, but most of the respondents to date reported cost inflation was higher in 2008 than the previous year.

2. More respondents are tracking their first fill capture rate this year than last. There appears to be a significant focus on this metric, based at least in part on the sense that the earlier the PBM can get involved in a claim, the more likely it will be able to minimize over-prescribing and inappropriate dispensing.

3. Respondents are more aware of the actual strengths and weaknesses of specific PBMs than they were in the past; the buyers with strong knowledge of and experience in this niche are pretty savvy.

4. The primary cost driver remains utilization - too many of the wrong type of drugs dispensed by too many physicians, especially for pain.

5. Clinical management programs are increasingly important to payers (see 5. above), and they are getting smarter about these programs, what works and what doesn't, and why. Marketing pitches aren't cutting it any more; these folks want to see programs in action, study the reports, and understand the logic.

The report will be out next month. If you'd like to download copies of the previous reports, click here.

Posted by at 10:14 AM | Permalink

The latest argument in favor of Washington getting serious about health care reform came late last week with the announcement that health premiums increased 95% since 2000.

Even more troubling, that premium increase isn't in '2000 plan dollars'; deductibles and copays have increased and benefits have been cut over the last nine years, making the 'real' increase much higher. Yet despite the reduction in benefits, the number of employers offering coverage has declined from 69% at the start of the decade to 63% in 2008.

It's about cost, stupid.

The Democrats' plans (with the notable exception of Wyden-Bennett) don't address cost - no, the public option isn't a solution (see earlier posts for why) and the 'co-op' option will do even less to restrain inflation. Republicans have been even more useless in this 'debate', distorting the various health care reform initiatives, cherrypicking provisions and then lying about the intent and potential impact, and offering no meaningful alternatives.

We don't need health care reform, we need health care cost reform.

If we don't fix the cost problem, family premiums will total $23,842 by 2020 according to a report authored by the Commonwealth Fund. (note that the Fund backs a strong public plan option and believes it will control costs; under the terms laid out by the Fund's Karen Davis, it would control price but constraints on utilization are weak at best - and that's where most inflation occurs.)

At what point will cost get so high, and the impact of those costs become so devastating, that we'll get reform?

It could be now - but I don't think so. Reform will happen, but the longer it is delayed, the more likely we'll end up with a draconian change in the system - perhaps single payer, or mandated government price controls. While the opponents of reform may think they are winning, they are merely delaying the inevitable. The same is true for those pushing reform without cost control - if they pass reform, and if costs continue to rise, their political future is certain.

Posted by at 6:57 AM | Permalink | Comments (2)

Health Wonk Review is up at David Williams' Health Business Blog.

With thousands of folks getting all wonk-y at town hall meetings, it's no surprise that David's edition is chock full of all that's reform. He did managed to separate wheat from chaff, so it's also all good...

Posted by at 11:46 AM | Permalink

It's quite clear the public plan option is not going to be part of any health reform bill, if any health reform bill is passed.

This despite the announcement yesterday that sixty progressive/Democrat members of Congress signed a document that they would not support a reform bill that does not include a public plan option. While I admire their willingness to take a stand, I don't believe that they will follow through.

THe good folks at the Campaign for America's Future invited me to participate in a call yesterday with Dr. Jacob Hacker, the brains behind the public plan option, as well as two Congressmen, Rep. Raul Grijalva and Keith Ellison. The gentlemen waxed eloquent about the progressive caucus' commitment to the public plan option, and all the reporters who got to ask questions focused on the political issues surrounding their position.

I didn't get to ask the 'other' question, which was in three parts; "How will this save money, and how will you convince providers to sign up, and how will it prevent cost shifting to private plans?"

Dr. Hacker addressed these questions in a monograph published by CAF; providers would be automatically signed up but could opt out; reimbursement would be set at 5% above Medicare; and cost-shifting is overblown.

I don't agree with Dr Hacker that most providers would join (why would they join a plan with no members at reimbursement much less than they are currently getting to serve their current patients?) or that cost-shifting is overblown - I see too much of this every day. I also don't see how a public plan would control the single biggest driver of health cost - utilization.

But it doesn't really matter if he's right or I'm right or we're both wrong - what matters is the political reality is there aren't the votes in the Senate to pass a plan with a public option.

The continued political brawl over the public option is pointless on at least two levels - it is clear there is not enough support for the option to include it in a bill that will pass the House and Senate, and if health reform legislation is written intelligently, the public option is unnecessary. Moreover, I seriously doubt the progressives will fall on their collective swords and vote 'No' on a comprehensive health reform bill if it doesn't include a public plan option.

My sense all along has been the public option is a stalking horse, one that the President and a few Democrats let out of the stable to create a little excitement, rile up the opposition, and distract attention from other provisions that are more important and meaningful, like insurance reform, mandated universal coverage, and comparative effectiveness research.

Boy were they successful. Once out of the stable, the horse took off bucking and snorting, and kicked up enough of a ruckus to perhaps kill the whole reform process.

Posted by at 10:13 AM | Permalink | Comments (1)

The scaremongers have apparently succeeded in forcing Senate Democrats to remove end of life planning from their health reform plans. This despite the original provision was introduced by a Republican (Johnny Isakson of Georgia) support of the measure by none other than conservative icon Newt Gingrich (at least he supported it until a few weeks ago...), a new study that demonstrates the importance of end of life planning, and the bill itself, which does NOT include mandatory 'advance care planning'.

(Section 1233 of America's Affordable Health Choices Act of 2009 amends the Social Security Act to ensure that advance care planning will be covered if a patient requests it from a qualified care provider [America's Affordable Health Choices Act, Sec. 1233]. Media Matters notes "According to an analysis of the bill produced by the three relevant House committees, the section "[p]rovides coverage for consultation between enrollees and practitioners to discuss orders for life-sustaining treatment. Instructs CMS to modify 'Medicare & You' handbook to incorporate information on end-of-life planning resources and to incorporate measures on advance care planning into the physician's quality reporting initiative." [waysandmeans.house.gov, accessed 7/29/09])

The reality is a relatively innocuous provision that had broad bipartisan support and was widely recognized as appropriate and helpful by the medical community has been used by opponents of health reform to scare the bejesus out of enough Americans to force its removal from the (future) Senate Bill.

And if you think the battle is over, you're sadly mistaken.

I don't know what seemingly mundane the next battle will be over, but if reform opponents can use advance life care planning as a cudgel to beat the heck out of the Democrats, than no provision is safe.

The Dems have all but lost the reform battle; polls are not favorable, opponents have created fear and concern among independents and moderates, and the President has been unable (to date) to use his formidable communicative powers and infrastructure to regain the momentum.

Unless President Obama and the Democrats get their act together, reform's chances are fading like an iceberg in a heat wave.

Posted by at 9:45 AM | Permalink

Work comp is affected by several factors, but none are as significant as the economy. After over a year of horrible news, things look to be slowly getting better. As activity picks up, we can expect the comp industry to start breathing again.

Last week the index of leading economic indicators improved again, marked by increases in housing starts and sales of existing homes, and manufacturing hours worked. Things have been on the upswing since April, although digging out of the worst recession since the 1930s is proving hugely difficult.

The employment picture also brightened somewhat in July, but the improvement is an indicator of just how bad things have been. 247,000 jobs were lost during July, the lowest total since last August. Auto sales were also up fifteen percent in the month driven in part by the 'cash for clunkers' program, and Ford announced it will actually increase production by 21% later this year.

The big concern has been inflation, which would choke off any recovery; so far, there appears to be no dramatic increase in consumer prices, with the consumer price index flat last month.

Those of us deep in the workers comp business have watched as the injury rate has declined along with the economy; with fewer people working fewer hours, particularly in high-frequency industries such as manufacturing, construction, and transportation, the number of claims 'fell off a cliff' during the winter. Moreover, the people who were laid off were the ones with less experience, and the pace of work likely lessened as well.

The drop in frequency hammered many workers comp service firms; with fewer claims, there has been much less demand for claim intake and triage, claims management, primary medical care, physical therapy and diagnostic imaging, medical case management, bill repricing, and utilization review. Provider networks have suffered as well with fewer bills resulting in lower revenues.

The decline in frequency was somewhat offset by a continued rise in severity - medical expenses and wage replacement costs.

Now what?

As economic activity increases, premium volume will increase in line with payroll. That's the good news - more revenue for comp writers. The bad news - for those comp writers, is the injury rate is likely to jump, and there are no indications that severity is going to decline. We may well be looking at an increase in the number of injuries coupled with higher costs per injury.

The good folks at the NCCI have looked at the impact of economic recoveries on workers comp, finding "Job creation is related to an increase in the proportion of workers who are inexperienced in their current job and, hence, more likely to sustain a workplace injury."

As firms staff up to meet demand for new houses, cars, and services, the faster pace of work, coupled with the inexperience of the new hires, will likely result in more injuries both in total and as a function of hours worked. Again, according to NCCI, "On net, the effect of job creation dominates quantitatively, thus generating the observed pro cyclical behavior in the growth rate of workplace injury and illness incidence rates. Further, it is shown that the growth rate of frequency tends to overshoot during economic recoveries, although this effect is not common to all recessions."

In layman's terms, we can expect a 'higher than expected' increase in the number and frequency of injuries. Here's how this will affect the comp industry:

- Insurers - higher claims volume and higher medical/indemnity expense equals greater losses, which may not be balanced by premium increases. I'm expecting combined ratios to increase this year and next, as premiums tend to lag experience (the continued soft market is a contributing factor, as some comp insurers persist in fighting price wars,)

- Claims organizations - TPAs can't wait much longer for a better market. Several have cratered, and others are losing business at a scary rate. Many TPAs get paid on a per-claim basis, and the drop in frequency has just murdered their top line, while the increase in severity means they are spending more resources (or not, for those TPAs near death) to manage those claims that do occur.

- Medical providers - The occ clinic companies - Concentra, USHealthworks, and their regional and health system-affiliated competitors, have been hammered by the drop in frequency. These clinics are primary-care focused, and are directly, and immediately, affected by any changes in frequency. Increases in severity have little effect on their results, as more expensive claims are almost always treated by specialists which don't practice at clinics.

- Managed care firms - While Coventry has continued to increase revenue during the recession, this has been driven by price increases and hard bargaining. Other firms, including Genex, IntraCorp, and the regional players have seen precipitous drops in activity for two reasons. The obvious one is there are fewer claims to handle; the less obvious is many of their customers - TPAs and insurers - have internalized managed care functions in an effort to hold on to revenue and capture whatever margin went to vendors.

- Specialty managed care firms - Companies focused on PT, pharmacy, and especially durable medical equipment and home health care have been affected less severely than other service firms. As the injury rate picks up, they will see more volume, particularly in the areas of PT and pharmacy.

What to watch for

Tracking trends in work comp requires the ability to see 'over the horizon'; none of the reporting agencies or entities have been able to collect data in real time, or anything close to it. Unless you want to wait for eighteen months, you'll have to rely on anecdotal 'data'. Here are a couple potential sources.

- TPAs and case management firms posting new jobs

- Individual company hiring notices, especially in manufacturing, construction, transportation, health care

- Employment statistics, particularly increases in hours worked and jobs created

Posted by at 6:41 AM | Permalink | Comments (1)

There are definitely more than ten, but here's my list.

10. A federal death panel will decide who gets care and who gets 'suicide-d'. This has been debunked almost as many times as it's been 'bunked', Section 1233 of America's Affordable Health Choices Act of 2009 amends the Social Security Act to ensure that advance care planning will be covered if a patient requests it from a qualified care provider [America's Affordable Health Choices Act, Sec. 1233]. According to an analysis of the bill produced by the three relevant House committees, the section "[p]rovides coverage for consultation between enrollees and practitioners to discuss orders for life-sustaining treatment. Instructs CMS to modify 'Medicare & You' handbook to incorporate information on end-of-life planning resources and to incorporate measures on advance care planning into the physician's quality reporting initiative." (Media Matters)

9. Illegal aliens will get free coverage. Nope, not true. In fact, none of the plans currently before Congress would allow the federal government to provide health coverage for illegal immigrants. The federal government does not currently provide coverage for illegal immigrants.

8. It's deficit neutral. President Obama has repeatedly claimed the current health care reform initiative will be paid for by savings, increased taxes on wealthier Americans, and reductions in Medicare Advantage and other payments. I doubt it. Providing coverage to tens of millions of folks who don't have it now will increase utilization - just like it did for Part D - and we can probably expect prices to go up too.

7. Health reform will lead to rationing. Again, I guess it depends on your definition of 'rationing'. If 'rationing' will reduce the amount of unnecessary and probably hurtful care, that's a great result. According to the Dartmouth Atlas, about a third of the health care delivered to Americans is not necessary and wasteful. I'm fine with eliminating that care - even if that means I can't get an MRI on my twisted ankle. That's not rationing, that's good medicine. Unfortunately, I don't see that happening anytime soon. And therein lies the problem with the 'deficit neutral' argument - more coverage will mean more services which will cost more money, driving up the nation's health care cost.

6. The free market which can solve the problem without government intervention. I'd agree (and have stated before) that the private insurance market could fix our health insurance problem, but there has to be a market first. The reality today is that almost every market is already dominated by a very few health plans, so much so that in most markets, there really is very little market competition amongst health plans. Until and unless we have open competition, we won't have choice.

5. This is socialism. Well, I guess it depends on your definition of 'socialism'. According to generally accepted definitions, socialized medicine is when the government employs the doctors and owns the hospitals and provides the insurance. None of the bills under consideration are anywhere close to that -which, BTW, exists in a relatively few countries like the UK and Cuba. In the proposed system, private insurers would continue to provide insurance to most non-seniors, Medicare would continue, and providers would remain independent.

4. My tax dollars would be used for abortions. Yes and no. Federal dollars for abortions are currently quite restricted, and would continue to be. Coverage for abortion services would remain only for rape, incest and to protect the mother's life.

3. We should just can all the private insurers and go to single payer, which will save lots of money in administrative expense. Not true. Private insurers have to account for and report future liabilities; the government doesn't. The ultimate liability for Medicare and Medicaid is in the tens of trillions of dollars. Moreover, the admin expense argument is unfair as the Medicare population is markedly different from the demographic served by private insurers. First, there's only one enrollment per lifetime. Second, there are minimal marketing/advertising expenses. Third, there are no premium taxes or other costs of compliance. No, while admin expenses would be lower, the huge savings touted by single payer advocates result from an unfair analysis.

2. A public plan would crush private insurers and we'd all end up covered by the public plan. Not even close to the truth. Some continue to complain private health plans will not be able to compete with a public option as the public plan will just dictate pricing to providers, and public plans wouldn't have the capital and financial stability requirements forced on private plans. They're half right. Re the capital requirements, they've got a valid argument. As we know all too well with Medicare and Medicaid, the Feds (and we taxpayers) have an ultimate unfunded liability in excess of $22 trillion, but that figure doesn't show up on any formal financial statements.

But when they complain about pricing, that's a red herring - for two reasons.

First, physicians don't have to accept Medicare or Medicaid, and wouldn't have to agree to any 'public option' pricing. In fact many docs don't accept Medicare today. As participants in the free market, they are able to opt out if they feel the compensation is too low - and many do.

The other factor is just as simple - pricing is but one component of the health cost equation. The others are utilization and frequency. 'Utilization' is the number of a specific type of services used by a patient, while 'Frequency' is the percentage/number of patients that use that type of service. And Medicare has not shown any ability to address either of these two factors.

1. And the top misperception about health reform - it will mean a bureaucrat will determine my health care, not me and my doctor. Uhhh, what do you think happens now?

Pull out your health insurance card, and turn it over. See the phone numbers on the back? Those connect you (first to voice mail hell), then eventually, if you're lucky and very persistent, to a 'bureaucrat', albeit one employed by your health insurer. They might even be located offshore ...

Posted by at 1:53 PM | Permalink | Comments (9)

Jonathan Cohn writing at 'The New Republic' has summarized what's happening with health reform better than I could. Here's an excerpt:

"Exhibit number one is the treatment of Eziekel Emanuel, the distinguished oncologist and bioethicist who is working on health reform at the Office of Management and Budget. In the course of his writings, which span academia and popular publications, he has argued forcefully and clearly against physician-assisted suicide. Yet somehow Emanuel finds himself accused of--wait for it--advocating physician assisted suicide...The attack on Emanuel is part of a broader offensive--an effort to persuade anxious Americans that health reformers will harm people who are seriously ill or who have disabilities...Every year, millions of families struggle to get affordable medical care for themselves or their loved ones--and end up in financial ruin, going without medical care, or some combination of the two. Many of these cases involve diseases like cerebral palsy or Parkinson's--or other conditions that require ongoing, expensive care.

Insurance companies try their best to avoid taking on these people. Apply for an individual policy with one of these pre-existing conditions and an insurer will reject you if it can. If it can't--if, say, you're lucky enough to get coverage through an employer--you may well find the insurance doesn't cover what you need.

Changing that isn't merely a by-product of reform. It's the whole point of reform. The plan Obama and his allies support would make coverage available to everybody regardless of pre-existing medical conditions. It would require insurers to cover a broad range of medical services. And it would police insurers to make sure they didn't try to get around those requirements."

Bob Laszewski has a similar perspective.

"Sarah Palin want-to-be Betsy McCaughey, who had her last 15 minutes of fame during the Clinton health care debate, claims Dr. Emanuel endorses age discrimination for health care services--basically saying he wants to pull grandma's plug.

NICE actually makes the British system's tough decisions so many worry might have to be made here. For example, last year NICE issued guidance rejecting kidney cancer drugs Sutent (sunitinib), Avastin (bevacizumab), Nexavar (sorafenib) and Torisel (temsirolimus). This leaves patients with only one treatment option – interferon. The reason is these drugs only extended the life of the patient a very few months but they cost about $200,000 to keep a patient alive that long.

Dr. Emanuel is one of the most widely respected health care ethicists in the country. The issues McCaughey is using were quoted out of context and had to do with one of the things Dr. Emanuel gets to think about at the National Institutes of Health--what to do when you don't have enough organ donors for those who want organs."

The question that opponents of reform are ignoring is this: "what happens to me and my family if Iose my health insurance? Am I confident that I will get the health care coverage I need at a price I can afford? And when prices double in ten years, will that still be the case?"

Our current health care system is unsustainable. Opponents of reform who do nothing but lie and have no real solutions will have no one to blame but themselves if reform fails and they can't get insurance or care.

Posted by at 9:39 AM | Permalink | Comments (5)

Yesterday we examined the potential impact on insurers and insureds of a failure to pass meaningful comprehensive health reform . Today we'll look at the effect on providers.

Again, we'll leave aside the possibility of individual bills addressing physician compensation under Medicare, a superMedPAC and other potential measures.

As health care costs increase, the number of employers who can afford coverage drops, as does the percentage of their workers willing to pay their share of the premium. And without meaningful reform that includes cost controls, there is zero evidence that costs will moderate on their own. While the cost cycle will persist, without structural change in the form of changed incentives for payers and revamped reimbursement by Medicare we're stuck with the same underlying trend of a couple points higher than overall inflation.

The latest data indicate this is already happening, as the largest health plans lost over four hundred thousand commercial members in total in the first quarter.

We're looking at fewer working families with insurance, but there's another problem - as employers change to high deductible plans, or increase the deductibles on current plans, employees will have to come up with more cash to pay for their care before their insurance kicks in. Fact is, almost one-fifth of Health Savings Accounts don't have any funds in them, and most aren't fully funded (the average account balance was about $950 for individual accounts and $1500 for family as of Q3 2008). Moreover, that only counts the folks who are enrolled in HSA-type plans who've opened accounts; according to a GAO study, in 2007 almost half of HSA-eligible plan enrollees hadn't opened an account.

The net? More patients without coverage, and a sizable chunk of those with 'coverage' don't have funds to pay their deductibles. The result? More indigent care, more unpaid bills, and more trips to the ER instead of primary care doc visits, trips that won't be compensated and will therefore result in more losses for hospitals and cost-shifting to the shrinking population of commercial insured patients.

Specialties that will be particularly hard hit include orthopedics, ophthalmology, dermatology, ob/gyn, neurology, physical therapy and neurosurgery. With many of their patients presenting with non-emergent conditions, these specialists will likely see a decline in patients as those without coverage put off care - that aching knee, slightly blurry vision, skin blotch or loss of sensation will be ignored as much as possible as long as possible. Ob/gyns will see an increase in indigent care, and a potentially considerable growth in patients covered by Medicaid (a notoriously poor payer in many states).

The consolidation in the payer industry (noted yesterday) will shift more bargaining power to healthplans, especially for physician contracts. Hospitals are a little better off, as many have gotten pretty good at negotiating with insurers and their proxies. But for those providers in markets with two or one dominant payer, rate negotiations will become increasingly one-sided.

Posted by at 9:24 AM | Permalink | Comments (9)

We know that much of the town hall opposition has been funded by right-wing advocacy groups. What we don't know is what will happen if they are successful in stopping Congress' efforts to pass and the President's to sign a comprehensive health care reform bill.

I'll leave aside the potential impact of bills addressing a 'superMedPAC', changes to Medicare physician reimbursement, and the possibility that HHS will get a better deal from big pharma. What will our country's health system look like in five years if there isn't reform?

Today we'll look at insurers and families, tomorrow providers and the 'macro' impact.

Impact on insurers
Without reform of the insurance underwriting and rating laws, insurers will seek to be even more selective about the policies they write. That's already starting to happen, and is a major reason the larger health plans are losing members this year for the first time in recent history. They just don't want the 'risk' that someone will have a claim. Healthplans will also continue to 'churn' their books - to try to dump policies that have been in place for more than three years, as that is about when claims start to pile up.

Can't blame them, as many are for-profit and therefore more committed to shareholder returns than patient care. That is not a value statement - it is a statement of fact.

The number of viable healthplans will continue to shrink. As a mature industry, the healthplan business has been steadily consolidating - if anything that will accelerate. And no, the free market will not increase 'choice'; we already have a free market for commercial plans (and Medicare Advantage and Part D) and in most areas there are at most two plans to choose from.

Smaller healthplans will find it increasingly hard to compete, as the big plans get ever-better discounts from providers, who have to make up the lost revenue by cost-shifting to the smaller plans with less clout. As their costs go up, so will their rates, until they either wither away or get bought out by the big plans.

PPO plans will get 'nichier and nichier'. Their higher medical costs will push members towards HMO-type plans, making it harder for employers with widely-spread workers to get affordable coverage unless they buy insurance from one of the big plans that operates in all the areas the employer has bodies. Inevitably, some workers will be left with poor coverage...

Impact on individuals and families
Bureaucrats at insurance companies will still be making decisions about what doctors you can see and how much they'll pay and what they'll cover and what they won't. You'll have to ask permission for services, and hope and pray they get paid. Those same bureaucrats will tell you they're interested in keeping you healthy, but that's only till they can churn you out of their book.

There will continue to be a hodgepodge of state-specific insurance mandates, rules, regulations, and enforcement mechanisms, as well as benefit designs and limitations. I'd note that under some of the reform bills under consideration, states will maintain a very significant regulatory role, but the benefit design and other 'customer-facing' issues should be simplified.

But the big problem is this - it will get harder and harder for individuals and employers to get insurance coverage.

Here's one all-too-common scenario. The breadwinner loses her/his job, and with it health insurance coverage. They find a new job, but that company doesn't offer benefits as they are too expensive. So, Ms/Mr Breadwinner, responsible person that s/he is, tries to buy an individual policy. There are several insurers that write those policies, so the applications go in - followed by requests for medical records, documents, and attestations signed by their physicians. Oops, one of the family has a mild case of asthma, and dad takes cholesterol medication, and mom saw a counselor a few years ago after her dad died.

Three insurers decline to offer a proposal, and the one that does will exclude any cardiovascular coverage for dad, any pulmonary issues for junior, and mom won't be covered for any psychiatric or anxiety or related issues. And, oh, the policy is 50% more expensive than the original quote. Leaving Mr/Ms Breadwinner to decide if they want to come up with $22,000 a year for less-than-full coverage and their HSA deductible (in 2009 dollars)...

Unfortunately there isn't any governmental assistance, so the Breadwinners, who make $75k a year, are looking at spending almost a third of their gross income on health insurance - insurance that doesn't cover their most likely health problems.

Think this is hyperbole? You're wrong. This is happening every day in every community, and if health reform doesn't happen, it is going to happen more and more often.

Unlike the right-wing fear death panels, this is reality.

Posted by at 2:53 PM | Permalink

I've been taking flak this week from several sources about inserting my 'political' views into this blog.

Guilty.

I'm also wondering why I didn't hear similar complaints a few weeks ago when I was pillorying the Democrats [here here and here] for failing to include anything remotely resembling real cost containment in either the House or Senate Finance bills. Which is exactly what the "Town Hall Protesters" should be yelling about.

The problem with the Dems' health reform efforts to date have nothing to do with death panels, rationing, government control of health care or any other right wing myth. We can't afford to expand coverage unless we control costs. Covering another 35-45 million folks without controlling cost will devastate the budget, force large tax increases, and take funds away from infrastructure, energy, education, defense, and other critical needs.

That's where the Dems are vulnerable - another entitlement expansion we can't afford. Yet for some reason the protesters aren't screaming at the top of their lungs about cost.

Are they not concerned about cost? Do they think a big new entitlement program is less of a problem than funding abortions or so-called death panels? Is the fate of Trig Palin more of an issue than the potential for vastly increased deficits? Are protesters OK with massive cost increases, as long as there aren't death panels or comparative effectiveness research?

Of course not.

If they stopped for even a moment and thought about the Democrats' proposed reform initiatives, the trillion dollar cost would become the front-and-center issue. Why haven't they?

Perhaps it is because the opponents of health care reform don't want anyone to start thinking about cost - after all, controlling cost means lower revenues and profits for hospitals, doctors, medical device companies, insurers, pharma, and other stakeholders. Sure, some will come out just fine, but the majority are terrified that meaningful, real cost controls will take big bites out of their top lines. But they can't say this in public, even if they're chewing their nails to the elbow in boardrooms.

So instead they are funding these fake 'grassroots' movements using made-up and patently false claims to scare the bejesus out of regular folks who will then (hopefully) kill any hope of health reform, thereby preserving the industry stakeholders' business models.

I don't have the resources to find out who the funders are behind Americans for Prosperity, Patients United Now (PUN - get it?) and many of the other groups. But there is ample evidence that one of the primary anti-reform groups is headed by Rick Scott, former CEO of hospital company HCA. The founder of Conservatives for Patients' Rights, Scott has hired the same PR group responsible for the Swift Boat campaign to gin up resistance to reform.

Scott is a sleazeball. While he headed up HCA, the company was fined $1.7 billion for Medicare and Medicaid fraud; the company grew by buying up as many hospitals as possible in a market then shut down selected facilities while jacking up prices at the remaining hospitals. Great for his investors, not great for patients, employers, or taxpayers in HCA-dominated markets.

He's also an investor in a Florida walk-in clinic operation, Solantic.

I'm sure there are other Rick Scotts out there, using their ill-gotten gains to encourage ignorant folks to rally against health care reform. I just wish I had the time to track them all down.

Posted by at 9:44 AM | Permalink | Comments (7)

Former Alaska Gov Sarah Palin (R) has added her own voice to those decrying the current health care reform proposals - and in so doing has added yet more evidence that she is not credible.

According to the unimpeachable Fox News, "Who will suffer the most when they ration care? The sick, the elderly, and the disabled, of course," the former vice Republican presidential candidate wrote on her Facebook page, which has nearly 700,000 supporters.

"The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama's 'death panel' so his bureaucrats can decide, based on a subjective judgment of their 'level of productivity in society,' whether they are worthy of health care. Such a system is downright evil," Palin wrote."

(Fox' pundits went on to agree with Palin; here's one "death panel" quote from one of the 'experts' at Fox.) Fortunately, the good folks at ABC did their homework, identifying the source of the 'death panel' BS - our old friend Betsy McGaughey.

Just hours after her initial wacko proclamation, Palin appeared to temper her bizarre assertions by asking health reform opponents to calm down and be civil, saying "we must stick to a discussion of the issues and not get sidetracked by tactics that can be accused of leading to intimidation or harassment."

Unfortunately the former Governor's call for civility hasn't had much of an impact - at least not in Memphis. Here's one rather telling excerpt from the article:

"Roger Fakes, 70, said he sat quitely [sic] during most of the meeting, but Cohen's insistence that citizens would be able to keep their private health care drove him to his feet.

He argued that changes to private insurance would force citizens into the government plan.

"There are some of us old gray-haired folks that don't want the government involved in any of our business," he said."

Alas, he's about as well informed as our erstwhile Vice President, Ms. Palin...It appears Mr Fakes isn't aware that the insurance he so ardently defends is a 'government program'.

This is one example of the apparent ignorance of at least some of the 'protesters' about what is being proposed, what alternatives exist, and the current state of the health care system. You don't know whether to be furious with these folks for their blind support for right wing causes or pity them for the ease with which they are manipulated.

As I and others have noted, there are significant concerns with the current health reform initiatives, yet none of the real concerns are in evidence at these corporate-funded outrage parties. Lets start with cost - our system just costs too much, and that's what is making it unaffordable. Why aren't protesters screaming about cost? Because the people funding their outrage are the very companies that base their business' success on that system.

Aided by their fellow travelers; here's anexample of the 'grass roots' nature of the anti-reform campaign. The tour bus that has been cruising around North Carolina with an "Americans for Prosperity" logo has been funded by none other than Koch Industries, one of the most notorious polluters in the nation. AFP has also challenged global warming, an intelligent energy policy (one that is backed by oilman T Boone Pickens, no less), and tobacco legislation.

Thank goodness the ACLU will fight to its last nickel to defend these slimeballs' right to publicize their propaganda.

Posted by at 7:23 PM | Permalink | Comments (2)

PPO company Viant (owner of Beech Street and PPONext) will be acquired by larger PPO company MultiPlan.

The announcement came last week; here's the lead from the internal memo to employees:

"After much thought and deliberation by our Board of Directors and our Executive Team, we have decided to pursue a new chapter in Viant’s long history. Therefore, it is with pleasure that we announce that Viant and MultiPlan have reached an agreement where MultiPlan will acquire 100% of Viant sometime over the next several months.

This decision was not reached lightly. Viant has demonstrated tremendous resiliency over the years, overcoming market and competitive challenges while still growing the business at attractive rates. However, the current U.S. economy and the political momentum around health care reform are very real and represent significant risks. As a result of these challenging and uncertain times, we have considered the most favorable strategic options available to our company that enable us to strengthen our position in the managed care industry and continue to grow. Clearly, economies of scale permit larger companies greater opportunity for growth and cost savings when facing uncertain times."

The two companies have significant overlap in their PPO networks; both claim five thousand plus hospitals and six hundred thousand plus other providers. It is highly likely the successor organization will pick the best discount deals from either network, giving customers (potentially) larger savings on some bills.

Unsurprisingly, there will be staff reductions; here's how Viant bosses Dan Thomas and Tom Bartlett put it: "Predictably, as the two companies integrate, downsizing will occur over time where redundant resources and costs are most apparent. We are confident that as this process evolves, the new company will endeavor to retain the most talented and professional employees from both organizations in order to emerge with visibly greater expertise and productivity.
There is no doubt Viant’s team is viewed very favorably by MultiPlan and it is committed to ensuring we achieve this objective."

So, what does this mean?

Large, broad-based, national PPOs have been faltering of late, as their ability to extract discounts from providers, especially hospitals, has diminished. Over the last few years we've seen the PPO market consolidate, with Beech bought by Concentra, First Health take over CCN, Coventry acquiring Concentra and First Health, and Aetna's purchase of PPOM.

Expect this to continue, but it's a losing game. PPOs are a cost containment solution that has fallen out of favor. While there will always be a place for them (think out of area coverage, work comp, companies with widely spread workers) they will continue to lose share to more tightly managed networks, vertically integrated systems, and Blues plans.

Posted by at 7:04 AM | Permalink

(Some) Opponents of health reform have abandoned all pretext of honesty, and instead have embarked on a campaign of fear, intimidation, and outright lies in an effort to halt Congressional action.

That's not to say advocates of reform haven't stretched the truth from time to time, but to date opponents' behavior is by far the more egregious. If you sense a tone of anger here, you're perceptive. These people are scum.

Exhibit One - The Death-ers

Last week, Betsy McCaughey said on Fred Thompson's show that the House health care bill contained a provision requiring counseling sessions for seniors on how "to do what's in society's best interest ... and cut your life short." House Minority Leader John Boehner (R OH) also said the same provision "may start us down a treacherous path toward government-encouraged euthanasia if enacted into law."

In reality, the provision in question simply requires Medicare pay for voluntary counseling sessions to help seniors plan for end-of-life medical care, including designating a health care proxy, hospice options, and advice on deciding on life-sustaining treatment.

Boehner and McCaughey's characterization is fear mongering at its worst. And puts them in league with blowhard Rush Limbaugh, who recently claimed Correspondent Helen Thomas would be "soon to be put out to pasture at Statist Farm...first time she gets sick it will be judged not worth it..."

It's also patently stupid - why would the Democrats seek to kill off a demographic that favors them?

Exhibit Two - The disrupters

God forbid opponents of reform actually let Congressfolk hear their constituents' opinions on this critical issue. No, they want to shout their Representatives and Senators down, intimidate them, and threaten those who disagree with physical violence.

News flash to the disrupters who are so blindly willing to be manipulated by the health insurance and medical device industries - this is a democracy, and the majority rules. You aren't the majority, you lost, get over it. Now you know how the other side felt for the last eight years, yet they didn't find it necessary to engage in brown-shirt tactics to vent their spleen.

Exhibit Three - Congress' plan to Canadian-ize our health system

False false false. Canada has a single payer system - which is not under serious consideration here in the US. There is no single payer option in any bill under review, and single payer has been specifically rejected by the President, Secretary Sibelius, the Senate Finance Committee, and most of the House. Committed liberals aren't happy with this, either.

Exhibit Four - The Canadian system almost killed me

Shona Holmes contends that she had to cross the border to get a brain tumor removed because the Canadian system would have forced her to wait over a year, and she would have died.

Highly unlikely. According to FactCheck; "CBC News (the Canadian Broadcasting Centre) aired a story July 31 quoting a top neurosurgeon in Canada saying that the claim that she would have died is "an exaggeration." Holmes was diagnosed with Rathke's cleft cyst, a rare, benign cyst that forms near the pituitary gland. It's not known to be fatal. [emphasis added] Another neurosurgeon told CBC News that he'd never heard of someone dying from the condition."

Yet the anti-reform forces persist in publicizing this nonsense.

When you confront these liars about the inaccuracy of these statements, they respond with allegations about the Democrats' secret agenda to move everyone to single payer, ration care with waiting lines, and cover illegal immigrants (again, why would a politician provide services to folks who can't vote?).

Ohhhh, here's why...

Posted by at 1:44 PM | Permalink | Comments (10)

The stock prices of health insurers wax and wane with the likelihood of health reform becoming reality - although in inverse. The announcement last month that the outlook for most of the major health insurers had been downgraded to (or remained) negative might be seen as an indication that reform is likely, or perhaps it is more a result of the conservative nature of rating agency Fitch.

Fitch's analysis makes sense - if a public plan option is passed that includes the ability to force providers to accept Medicare or similar rates, then it will murder the private insurers. But that is just not going to happen. There is zero chance of any reform measure passing that includes a public plan reimbursing at Medicare - or any rates close to Medicare.

The ratings company's assertion that reform that includes guaranteed issue without mandated universal coverage and/or pricing flexibility and/or underwriting is a bad idea has been convincingly demonstrated in Massachusetts.

That doesn't mean the industry has substantial risk. But that risk is more resulting from the current economy than the potential problems from health reform. This was confirmed by Mark Farrah & Associates' report that the top eight plans lost more than four hundred thousand commercial members in the most recent quarter. If anything, the employment picture is a lot more significant for health plans than the much less likely chance of public plans and other 'maybe' events. According to Farrah;

"WellPoint and UnitedHealth, the two largest plans in the United States, saw total enrollment declines of 490,000 and 465,000 respectively. The economy and maintaining strict pricing and underwriting discipline were cited as reasons for the declines."

What Fitch is not adequately considering is the very real opportunity for health plans. The smart ones (a limited population to be sure) will see this as a big chance to gain millions of members. The even smarter ones will quickly move to slash their admin expenses by eliminating underwriting, refining marketing, and investing heavily in population health.

I'd note that Fitch now has awarded all plans the coveted 'negative' status; I believe this is misguided, as there are clearly several that are better positioned to take advantage of reform (if it happens). I'd include Aetna in that group; they actually gained 1.4 million members in Q1 2009.

Posted by at 6:00 AM | Permalink

Jaan Sidorov is hosting this biweek's edition of HWR; there are more than a few new bloggers featured, along with some old vets. But the great thing about Jaan's edition is it covers the entire spectrum of reform - and a few other topics highly relevant to today's debate.

And the guy can write...prose AND poetry.

Posted by at 6:49 AM | Permalink

Today's NYTimes confirms that the deal struck by big PHRMA and the Administration over drug costs is set in stone; the White House confirmed that they will not go back to drug companies and ask for concessions beyond the $80 billion already promised. House Speaker Nancy Pelosi (D CA) has said Congress is not bound by the deal, but it appears that pharma is safe.

I'll leave the sticky policy implications for a later post, but for now consider what this means for workers comp.

Recall that the current law of the land prevents negotiations by the Secretary of HHS with drug companies over price. This significantly limits the Feds' ability to reduce costs, and is somewhat unique as most other of the G20 countries do negotiate directly with drug companies - either for prices directly or via a reference or index price scheme.

With yesterday's 'announcement', the concern that work comp PBMs and payers (should have) had over the potential for a massive cost shift to comp appears allayed. There was significant concern that had the Feds forced the pharmaceutical industry to cut prices (via price negotiations, reference/index pricing, or a mandated Medicare rebate) manufacturers would raise prices charged to other payers - and the softest target out there in most states is the comp industry.

The big PBMs - CVS Caremark, Medco, Express - are all large enough to negotiate attractive deals on their own, and many of the payer-based PBMs would also be able to protect their pricing (or piggyback on deals cut by the big three). Not so for comp PBMs, which traditionally pay higher rates to pharmacies due to the higher handling and transaction costs associated with complying with state regulations and identifying and routing scripts.

What does this mean for you?

This doesn't mean all is fine in the comp drug world, but it does mean the $2 billion plus industry has dodged a very large bullet.

Posted by at 6:12 AM | Permalink | Comments (1)

The good people at the Kaiser Family Foundation have put together a terrific tool that enables side=by=side comparison of all the major health reform plans - or selected plans - across one or multiple areas.

For example, I looked at the Wyden-Bennett plan compared to the latest Senate Finance version and Rep Tom Price's (R ) offering, specifically on cost containment, mandate, financing, benefit design.

Once again, W-B looks best - and cheapest too.

You'll undoubtedly have your own set of criteria, and KFF is keeping this updated to reflect the latest variations and changes. Keep it tabbed if you want to stay on top of the real story.

Posted by at 6:45 PM | Permalink | Comments (1)

Those vultures have nothing on (some of our) health care lobbyists and their funders.

After returning to 'civilization' from a couple weeks in the Tanzanian bush, it is interesting to see how much progress we've made in the health reform debate - or, as the Obama administration has taken to calling it, the 'health insurance reform' debate. As a measure of just how much progress has been made, some opponents have called out the big guns of misinformation and outright lies, employed at the 'grass roots' by people who, whether they know it or not, are working against their own best interests.

There have been many reports of town hall meetings disrupted by what appears to be carefully organized groups, using an approach scripted by a Washington lobbying firm headed by none other than former Texas Republican Rep. Dick Armey.

Armey's clients include insurers and medical device companies, firms that are terrified of the potential that health reform may actually harm their business models. The disrupt and obstruct model was actually tested here in Connecticut in a town hall meeting held by Fairfield County's Jim Himes (D). Read the memo at the link to see just how disgusting these people are.

What's interesting is reform as currently described in the House bill would have the opposite effect - it would create a huge new constituency, a new market of folks previously without insurance who would suddenly have access to coverage - and the care that that coverage buys. Care that would include stents and drugs and MRIs and surgical implants and pain meds and therapy and tests and operations - creating revenue for Armey's clients.

Now I don't for a minute believe Armey's clients are dumb. Therefore they must be concerned - very concerned - that reform will actually hurt them financially.

That's really good news. The implication is clear - the health care industry fears that Congress will pass and the President will sign legislation that will actually control costs - reducing the overuse of drugs, technology, and treatments and impacting insurer admin expense. That certainly hasn't been apparent from the House bill, or for that matter the bills that have gotten the most attention in the Senate.

I don't know if they know something I don't, or if they're just running (very) scared, but I'm hoping their concerns are well-founded and we'll see a serious health reform bill that does attack cost.

I'd suggest anyone who wants a dispassionate, objective, factual review of the debate make it a point to visit Politifact,

Posted by at 8:13 AM | Permalink | Comments (1)