Friday, October 30, 2009

Modified Wyden Free Choice Amendment

Sen. Wyden has modified his free choice amendment....short version is that persons who could show employer arranged insurance that cost between 8-10% of income would be allowed to shop for insurance in the exchanges. CBO estimates 1 Million extra insured at cost of $5 Billion over 10. This would be a good amendment to the Senate bill, and would begin to open up the exchanges to more persons.

Today's News and Observer Column

Focuses on the inclusion of the pared-back public option....public option light that was included in the Senate bill. I had to write the column by Wednesday before Senate bill text was out....then yesterday the House bill text did come out.

Both in include a public option that requires the govt insurance plan to set up networks and negotiate rates. The CBO says the House version will sign up 6 Million folks. Today there are 160 Million with employer provided insurance. The Senate version is likely to be similar and has an opt out provision, so if some states opt out, even fewer would be covered by the public option.

I am sure that public option will get much press and debate, but it is not the most important issue.

Thursday, October 29, 2009

CBO Assessment of House Bill

House releases its reform bill today, here is the CBO assessment of it. Haven't looked at it or the bill closely.....spent most of the day driving to Charlottesville, Va. and giving a lecture. But, big picture is covers 36 Million uninsured (96% cover of legal residents), has total outlays of just under $900 Billion, reduces deficit by $104 Billion, financing via cuts to planned Medicare funding of around $400 Billion, and income tax increase for those with incomes of $500,000 for individuals and $1Million for couples. Has public option (no opt out) but doesn't use Medicare payment rates....has full negotiation of rates. Also includes the CLASS act provisions which are a long term care plan that comes from Senate HELP bill.

Here is full text of bill if you are bored.....weekend reading.

This will be a fairly weak public option....lots of fighting about it, but it is not going to be that consequential I don't think. CBO says that 6 Million folks will sign up....out of 307 Million Americans....not exactly a crushing defeat of the private insurance industry.

CBO says this about house public option.

Roughly one-fifth of the people purchasing coverage through the exchanges would enroll in the public plan, meaning that total enrollment in that plan would be about 6 million.

That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that “adverse selection” on the public plan’s premiums would be only partially offset by the “risk adjustment” procedures that would apply to all plans operating in the exchanges.)

Wednesday, October 28, 2009

Pubic Option Light

is the word in the House as well. Speaker Pelosi will unveil the House bill tomorrow that will have a public option, but one that will negotiate rates with providers instead of tagging payment rates to Medicare payment rates. This won't save much money, and it is not really clear that such a public option will be able to develop reasonable networks, and negotiate successfully in a way that lets them compete with private insurers. So, public option is in the House and Senate bills, but they are both mostly symbolic and won't do much. There will be great hyperventilaltion on both sides over this.....but both sides will be overstating the importance of THIS version of public option. Much ado about nothing, I think.

Also, the real action is going to be between the House income tax increase (on individuals %500,000+, families $1Million and up) v. Senate tax on high cost health insurance.

Tax on high cost health insurance is far preferable, because it will have some hope of controlling health care costs, and is at least a beginning to getting rid of the tax exclusion of employer provided insurance. I wrote about that last week. Wrote a few weeks ago in the Philly Inquirer a bit more about trying to improve the cost saving aspects of reform bills under consideration.


News and Observer today has a piece on pushback to Blue Cross Blue Shield NC's mailer opposed to a public option here. I blogged about this last weekend. Hint: I suspect there are parts of NC that would be swayed by these types of mailings, but save your postage to Durham and Chapel Hill. I have been surprised by how many folks I have heard talking about this in the circles in which I run....which are the only ones I have direct knowledge about.

Also, some seem to be suggesting and are mad that BCBS NC used enrollee records to target the mailers, but I got the mailer and I don't have any BCBS insurance (nor does my wife). It is a general mailing, and mine is addressed to The Taylor Family or current resident.

Plus, so what if they want to mail to their customers advocating their position? Seems fine to me. Also, from the other side, if they mail it and it backfires on them by making folks angry, no one to blame but yourself.

Adam Searing has an op-ed in today's N and O on the history of BCBS NC, and how he feels the current form is not true to its history.

Ignani and Tauzin

Interesting story about Billy Tauzin, chief lobbyist for pharmacetical industry and Karen Ignani, chief lobbyist for health insurance industry.

Rep. Jim Cooper of Tennessee sums up big picture of the reform deals with these two groups over the summer: “The basic deal for these two industries, and others, is that they promised to behave if they get 40 million new customers. But now they are seeing they might not get as many new customers, and they are wondering if they still have to behave.”

Tuesday, October 27, 2009

Public Option

Sen. Harry Reid's decision to include a public insurance option in the merged Senate health bill is the story of the week, no doubt. Lots of angst and excitement. And Sen. Lieberman must be feeling neglected, but he has managed to make himself the center of attention. Earlier today he said he would vote to support a filibuster....and it wasn't clear if he meant a filibuster for a procedural motion to start the debate, or if he meant he would do so if it remained in after debate and amendments were done. Seems like the latter, that he will vote to start debate, but says he will vote to filibuster final passage if public option stays in. Of course, this is a good way to get yourself lots of power.

It seems there are several possibilities/
1. Reid thinks it is the best thing and is willing to take a chance for public option.
2. Reid knows it will go down, but needs to placate liberals. Bring it up, it goes down, modify the bill and then move ahead. Who knows maybe they bring it up, Repubs filibuster and get it out of their system say the Dems are destroying western culture as we know it etc etc and Dems say they are Neanderthals and later pass bill without it.
3. This is part of a House/Senate compromise that is designed to hopefully get the House to accept tax on health insurance plans (Senate approach) than the income tax increase financing mechanism in House bills.
4. This is a mistake.

I think med malpractice reform coming in is only way for the public option to have any chance. There are some rumours of a 'surprise' being in the Senate bill (I haven't seen text anywhere?) and perhaps this is medical malpractice reform. Especially given CBOs recent scoring of package of national reforms that have been tried in some states to reduce deficit by $51 Billion over 10 years.

Also, the funniest thing about all this is that the 'level playing field' public option in which govt insurance negotiates rates will most likely not be that successful. Savings would come from Medicare rates or Medicare + 5% or something like that....both sides are greatly over stating the actual effect of the type of public option that seems to be under consideration.

Historical comparison of policy impact on Medicare

Interesting policy brief from Kaiser Family foundation comparing the size (in terms of percent of medicare spending) proposed medicare cuts to past changes. A lot smaller than the Balanced Budget Act of 1997....and in that case cuts went straight to deficit reduction. You do remember we had a budget surplus in 1999 and 2000 don't you? Seems a long time ago.....

Monday, October 26, 2009

Interesting from Peter Orszag

the President's director of Office of Management and Budget (and the previous director of Congressional Budget Office). He responds in this post to a column in the Washington Post saying the two things with the best chance to control health care costs--changing tax treatment of employer paid premiums and a Medicare advisory commission--are missing from reform. Orazag notes that the tax on high cost premiums is a de facto capping, as I wrote last Friday, and that there is a Medicare advisory commission in the Baucus bill.

I agree with this and if these two items stay in, they should slow cost inflation. The worry for many worried about costs is that these are two things very likely to go in a House/Senate negotiation....but obviously Orszag should know. This blog post is fairly close to the White House saying those two things are priorities for us.

I also agree with him that there are some aspects of Baucus that the CBO is not crediting with savings that probably can save some money, but tax treatment and a Medicare commission are the two most certain. And both of these items are more important for cost control than is a public option (though I support a public option).

I also agree that doing nothing is the most certain path to fiscal disaster. Put another way, doing the same thing but hoping for a different result is one definition of insanity. Here is do nothing projection of the federal deficit.

Reid presser

Opt out public option in....interestingly this says Reid not sending trigger option to the CBO.

Opt out in first?

This says Sen. Reid will have public option with opt out clause for states....meaning default will be for some version of public option. The 'version' refers to the payment rate standard. Medicare, Medicare +5%, public negotiate payment rates like private insurance, presumably on state by state basis.

They are apparently going to have multiple bills scored, who differ only by public option provisions, so if the above fails a cloture vote (60 say lets stop talking and start voting), then will come a triggered public option favored by Olympia Snowe (start out with no public option, then it comes in state by state based on inability to get to set cover level and/or lack of reduction in health insurance premium growth).

But, most people writing say there are only 57 or 58 votes to cut off debate for the opt out public option. Maybe there will be some serious floor debates in Senate with outcomes not clear...Seems as though Reed would rather lose in the open on this, then have it go down in the back room that he is in charge of. Also, in one sense this can let the Repubs have a successful filibuster, say they killed the ending of a America as we know it by 8 Million people signing up for government sponsored public insurance (when we already have 105 Million people covered by Medicare and Medicaid!) and then the Dems offer the trigger and move ahead.

Next steps

I don't have any inside info to add. This says Sen. Reid will send bills to CBO today with different public option options embedded. Soon the President will have to say exactly what he wants.

Here is Al Hunt saying reform unravels sans Sen. Snowe. This of course angers liberals in House and Senate. And the clock ticks, so it would seem the Pres. will have to step up soon and tilt the balance in a given direction re the public option.

Speaking of which, a few weeks back I wrote that I assumed that Blue Cross/Blue Shield NC would oppose a public option in NC. I got a mailer from them over the weekend with the following tag line:

"No matter what you call it, if the federal government intervenes in the private health insurance market, it's a slippery slope to a single-payer system. Who wants that?"

Actually, to answer the question they pose rhetorically.....probably a majority of the people I know who live in my neighborhood and who work at Duke.....but the whole world doesn't live in Durham and Chapel Hill.

The mailer then asks folks to contact Sen. Hagan and tell her to "Tell Senate leaders that North Carolina doesn't need government-run insurance." [presumably exempting Medicare? My grandmother needed government run health insurance in the form of Medicare last week when she was hospitalized]

Saturday, October 24, 2009

Premium inflation for small businesses and public option

Story in the NYTimes about very sharp increases in health insurance premiums for small businesses. During the 1993-94 reform discussion, premium increases moderated a bit....some felt as though there were attempts to slow premium growth as a way to thwart the need for reform. This story tells another story, more rapid premium increases ahead of anticipated reform, as the story calls it 'make hay while the sun is still shinning.'

And the WSJ has a story on House Dems (Speaker Pelosi and Whip Clyburn) being open to alternative public option proposals....namely that such a plan would negotiate rates with providers instead of simply paying some set increase over Medicare rates.

Public Option seems to be much in play and gaining large part because the polls that actually describe how a public plan would work tend to show support for it, and because adding a public option will lead to savings per CBO. It is also gaining in confusion....because you actually have to land the plane and pick one of the public option options. Public option still seems to be tied up with state opt out options. Also, yesterday Sens. Landrieu and Lieberman seemed to signal they would not filibuster a bill with a public option.

The various proposals:
(1) full public option which would be national plan, essentially allowing people to buy into Medicare, with payment rates set at Medicare rates. Others want Medicare payment rates plus 5% as a way to encourage docs to take the insurance.
(2) state based public option that would allow states to set up a public plan; by definition, the mechanism would differ by state. Some states could simply allow people to enroll in existing mechanisms like the state employees insurance scheme.
(3) national plan that negotiated payment rates like other insurers do.

Sen. Snowe has been in favor of a trigger option, meaning you would start withouot a public option and one would come about only if targets related to insurance cover rates and/or cost increases, and this would be state specific. She seems to be one of the few for this option, but the White House continues to show her great deference.

State opt out. This would say a state could have a public option or not at the state's discreation. The could be done with a national public option with some opting out, or could simply allow individual states to set up a plan.

I think this next week we will see some attempt to land the plane, and see a Senate and a House bill that will then move toward the floor. I think a big part of the back story is that as the Senate has moved toward some sort of public option, the Speaker has moved to back off the stronger public option because with none in the Senate, the House has to pass more to give it leverage in the conference committee/bill. But, if the Senate is going to pass one, the House is more likely to move toward that (incl. opt out) in an attempt to hold Dem moderates on board.

Also, I think a med mal component is still likely to jump into the mix late as a way to solidify moderate Dems.

Friday, October 23, 2009

Today's News and Observer column

focuses on the Senate plan to tax high cost health insurance plans to help pay for reform. One of the biggest showdown issues between the House and Senate Dems will be over taxing high cost insurance plans (Senate), or income tax increases on persons with high incomes (~$500,000+). The insurance tax is preferable, because it would help slow health care cost inflation as some would reduce the amount of insurance they hold. And this would at least be using money already in the health system for reform, whereas the income tax increase is bringing in a new source of revenue to a system whose main problem is that it costs too much.

Ezra Klein has good post outlining what is emerging from the House. The House bill with the Senate's high cost insurance tax, some sort of public option (probably the middle one in House lingo) with a state opt out, and a malpractice component sounds about right.

Taxing high cost health insurance (heck I would end the tax exclusion altogether, but you have to get what you can get) is far preferable to an income tax increase to pay for reform. While conservatives typically hate all taxes, this is actually a tax that should help the market work better by getting rid of distortions in the market for insurance. The tax exclusion of employer paid premiums shields consumers from the true cost of their insurnace, and businesses are shopping with someone elses money when they arrange health insurance for employees.

***More. This sounds like the President is more in favor of the trigger public option, meaning come about only if insurance cover doesn't reach a certain level (I think 94% of legal residents is what is being talked about) and/or some slow in health care cost increases. And main point there is Pelosi saying robust public option (national plan, pay Medicare + 5%) can't pass House. Senate seems to be moving toward public option up front, with state opt out.....but Sen. Snowe (aka second most powerful person in Washington) is said to want trigger.

Still more on public option options, and how the 60 votes to overcome a filibuster makes alot of difference in how things are structured.

Thursday, October 22, 2009


The Senate voted down an attempt to put through a Medicare payment fee change that would restore doctor payment cuts (that were set to take effect in Jan. by the Balanced Budget Act of 1997), 47-53. Most who voted against are for the change (which is effectively increasing how much docs get paid by Medicare compared to what they will be paid absent any action), but revolted because the $237 Billion cost over 10 years wasn't paid for by reductions in planned federal spending.

Harry Reid was saying this is not part of health reform and lets do this now and then move to reform....but 12 Dems defected. Also, about 20 Republicans who originally were for it also revolted, so it was an odd coalition both for and against.

Now any Republican who was in Congress from 2001-2008 (esp. 2001-05) claiming to be deficit hawks is ironic at best....that was essentially the season of the great national Visa card splurge. But, I believe in redemption, so I am glad to see that 12 Dems went against the Senate leadership to stop this. Also, I would prefer a shorter term fix. We need to address physician payment in Medicare in a more fundamental way, so I wouldn't be locking in too much for too long. But, this is a risky move, as the AMA and docs generally wanted this and wanted it for 10 years (the full fix). So, they (organzied medicine) will not be happy. Not sure who they will be the maddest at, the 12 Dems who voted no or the Repubs who were going to vote yes and then changed their mind.

The Dems who voted no inlcude Kent Conrad, Chair of budget committee and a deficit hawk type, and more liberal types such as Bernie Sanders, Ron Wyden and Russ Feingold.

It is being sold in some quarters as a set back for reform, but I disagree. It shows focus on trying to do it and be responsible at the same time. Again, quite a break from the past 8 years. Not clear if this is just plain dead or if there will be an effort to do this bill with budget offsets outside of the reform bill.

Wednesday, October 21, 2009

Lots of big items

In the wow category, the American Cancer Society has said the following

"We don’t want people to panic,” said Dr. Otis Brawley, chief medical officer of the cancer society. “But I’m admitting that American medicine has overpromised when it comes to screening. The advantages to screening have been exaggerated.”

This is a big deal. And what he is really saying is in some cases there are no benefits to screening practices, in others there are more costs than benefits, and in some the costs of any benefits are very large. Of course in some cases, there are clear benefits. The key is getting straight what things we do work and what doesn't. This is a big deal. I agree that there are dangers of going from screening definitely always works to the other ditch of it never works. A paper published in JAMA drove this announcement. The newspaper notes that:

"In it, researchers report a 40 percent increase in breast cancer diagnoses and a near doubling of early stage cancers, but just a 10 percent decline in cancers that have spread beyond the breast to the lymph nodes or elsewhere in the body. With prostate cancer, the situation is similar, the researchers report.

If breast and prostate cancer screening really fulfilled their promise, the researchers note, cancers that once were found late, when they were often incurable, would now be found early, when they could be cured. A large increase in early cancers would be balanced by a commensurate decline in late-stage cancers. That is what happened with screening for colon and cervical cancers. But not with breast and prostate cancer."

There is a scheduled Medicare payment formula change in how Medicare pays docs that comes about next year and would drop doc fees. The Senate had wanted to restore the fees to current levels and add a bit, but doing it over 10 years would cost about $250 Billion. Harry Reid wanted to do it on its own and not as part of health reform, but Repubs and some Dems said no. So, that appears to be stopped. Repubs say they want to do the increase but also want to pay for it with cuts somewhere else. We will see. Generally, Medicare needs profound reform in how doctors are paid, away from fee for service. But, that will take time. Sounds like they may do a short term solution (say for next two years) which seems reasonable, especially if a real Independent Medicare commission is created in reform to look comprehensively at this issue.

Republicans in the last day or so have started talking about malpractice reform and it 'not being too late' to add it to the discussion. This is the surest sign yet they believe a bill is inevitable and are now trying to influence it. The CBO said it will save $51 Billion over 10 (with it being a nationalized mix of reforms already tried in some states). This report was good news/bad news for republicans and those who think malpractice reform will save lots of money....CBO for first time estimated a cost of defensive medicine.....but the estimate is much lower than some other estimates. Here is Newt Gingrich saying this morning add this into health reform and that CBO low balls the estimate. If Dems really wanted to be sneaky they should immediately adopt the CBO proposals and agree with Repubs that CBO has low balled cost savings and ask them to join them in saying that adding this to Baucus will reduce the deficit by HUNDREDS OF BILLIONS of dollars. Mr. Gingrich gives a range of savings from defensive medicine of $160-$210 Billion PER YEAR! CBO says $51 Billion over 10 years. If it were $200 Billion per year, then adding this to Baucus would mean that it would reduce the deficit by about (lets be conservative) $1.5 Trillion over 10 years......

I think CBO has it about right, but would be happy to be wrong.

But, I also think malpractice reform should be added in....because we need to save where we can, we need to give the docs a victory to bring them along, and because we need to take the 'what about defensive medicine' retort to any cost saving proposal that doesnt' work out (meaning docs will now blame defensive medicine without addressing the issue).

I have written about this here. And the first question I posed in my column on last Friday, appears to have been answered: looks like the Republicans may play. And adding malpractice reform to any bill will solidify conservative Dems support, and of course, the docs.

Monday, October 19, 2009

End of life discussion

I was a guest on KUER in Salt Lake City today, talking about end of life care and health reform. Also, I was fortunate enough two weeks ago to receive a new RO1 research grant from the Agency for Healthcare Research and Quality that will attempt to lay some ground work for a revised Medicare hospice benefit, that would transition toward a palliative care benefit.

The project will identify patients with serious cancers, who will be asked to tell us about their preferences for care given their disease. The project will not only ask individuals about their preferences, but will then include a group based discussion to see if preferences are altered by group based discussions. The project will benefit from Drs. Amy Abernethy and Yousuf Zafar here at Duke Cancer Center, and Dr. Marion Danis, from NIH who is an expert in measuring patient preferences.

The project will hopefully provide some insight into patient preferences that could be used to modify the current Medicare hospice benefit in ways. The bottom line is to see if we can expand choice and quality of life while holding the costs spent under hospice as it now exists, constant.

218 and 60

The two most important numbers in Washington....the number of votes in takes to pass a bill in the House (218) and the number of votes it take to defeat a Republican filibuster (60) in the Senate. Big issues remain the same, financing (income tax v. high cost insuranc tax), public option or not, and state discretion. Affordability is also a concern, but it probably can't be addressed fully if the President's desire for total outlays to be $900 Billion or less over 10 years are held to. So, there will remain concerns about the ability of some uninsured to afford insurance that a mandate would force them to buy.

And WSJ says Pharma companies will make out better than insurance companies, at least according to what their stock prices since Labor Day say.

Friday, October 16, 2009

Discretionary budget priorities

A cool graphic that depicts the 2008 discretionary budget....meaning the items not funded by payroll taxes (social security, medicare). Pretty cool.

Affordability and financing

Report from Center on Budget and Policy Priorities. Table 1 in particular is a nice side-by-side of how the premium subsidies differ across Baucus, Senate HELP and House bills. Big differences are between 133%-200% of poverty, where Senate HELP has people paying 1% of income 3.7% between 133-150% and 4.5% between 151-200%. 200-250% it is 3.3% v. 7%. You can of course address the affordability concerns by adopting HELP premium standards....but you then have to pay for it. I have an idea. What if we cap the tax exclusion of employer paid premiums! This will address affordability and will inject a much stronger dose of control into the bill. Set the cap at the national average and reduce federal deficit by about $500 Billion over 10 years (v. $201 B over 10 with tax on high cost insurance).

This is the most bipartisan thing cooking with health policy types. This is a different approach, from an imminent conservative economist but has as a centerpiece eliminating the tax exlcusion. I actually think what he wrote is not really all that different from what I wrote in the NYTimes blog a while back. They both are premised on providing catastrophic cover for all, and getting people to purchase other insurance if they want to do so with after tax dollars.

Taking a big whack at the tax exclusion is the simplest way to reduce health matter what type of approach you fund with revenue.

All in the family

Article describing Senate Democratic lunch described by one attendee as 'slightly less raucous than the town halls' in August. And stand alone bill coming to reinstate planned Medicare cuts to doctor payment rates. Thinking about the class in comparative health systems I teach at Duke, there is no example of a nation undertaking a large change in the health care financing of a nation without the docs being on board. Anneurin Bevan, father of the National Health Service in the U.K. is famously said to have answered the question of how he got the docs to go along with the founding of the NHS in 1947: "when they opened their mouths to protest, I stuffed them with gold."

hints of new House CBO score

House has been working to pull total outlays down from the $1.2 Trillion of HR 3200/Tri-Comm bill as passed out of committees in July, to the President's outline of $900 Billion over 10. Hints at a new CBO score of this pared back bill. Total outlay $905 B and 95% coverage of persons in country legally, but no estimate on deficit effect. Does have public option, but CBO has consistently been scoring this as cost saving.

More on cost shift v. price discrimination

Uwe Reinhardt weighs in convincingly. In fairness, if the cost shift story is called into question on the private v. Medicare side (idea that private insurance must pay providers more and then charge their customers more to make up for cuts in Medicare payment), then it is rendered questionable on the uninsured v. private as well (I think). Medicare explicitly has some accounting for the uninsured in the form of Disproportionate Share (DSH) payments. Drops in such payments to hospitals based on how much uninsured uncompensated care they provide is part of the drop in planned Medicare costs....since the number of uninsured would fall under a new bill.

Column in today's News and Observer

Lays out several questions, whose answer will help tell the final story about what does and doesn't happen with reform this year.

Thursday, October 15, 2009

Health Care Changes in China

Interesting article in the WSJ about changes in health care in China. I spent a couple of weeks teaching a short course at Peking University this past summer which was an interesting experience. One interesting change is the allowance of couples to have two children if they were both single children (as most are). This will introduce quite a 'baby boom' and it will be interesting to watch the age structure of subsequent generations. When I was teaching at PKU this summer, one of my students noted that they could use payroll taxes to fund health expansions as the larger birth cohorts come into working ages, and she then asked 'are there any problems with that approach?; Hmmmm......

Philly Inquirer

Frank Hill and I have the same piece that was in the Newark Star-Ledger earlier in today's Philly Inquirer. If I could do one thing re health reform I would limit the tax exclusion of employer paid insurance premiums. At least then people would know how much their insurance cost. This would definitely slow health care use and eventually insurance premium growth. The more I talk with individuals about health reform, the more I believe that though everyone says the want to 'save money on health care' most of them don't mean it. Because saving money, or reducing the rate of growth means actually using less. Like I said here and here.

Another take on anti-trust and health insurance

An interesting analysis of the recent discussion in Congress about removing a partial anti-trust exemption that has been in force in the U.S. since the 1940s. In short, Austin Frakt is arguing that large insurers with larger market shares are better able to negotiate down payment rates in a way that *could* reduce premiums. This would leave open a chance for a private insurance based system with universal coverage eventually driven through mandates to purchase and subsidies. He further notes that small insurers could be disproportionately hurt by ending anti-trust exemptions due to curbs in data sharing that are used to set rates/underwrite.

Wednesday, October 14, 2009

Insurance regulation

New discussion today in Congress about ending limited anti-trust exemption that the insurance industry has operated under since 1945 (the McCarran-Ferguson Act). This Act allowed states to regulate insurance. This issue of state regulation has come up in several ways during the reform discussion:

*Here, democrats in the Senate and saying this law has allowed insurers to be anti-competitive because they could work out deals with state regulators. Of course the insurance industry denies this and notes that they are regulated by states.
*An oft-noted panacea in response to reform bills offered by Republican lawmakers has been to 'allow people to buy insurance across state lines using the internet'. A reason this is limited now is presumably the same state regulation approach that Democrats are saying should be ended above. [Baucus bill allows states to enter into compacts or cross state agreements to allow for insurance to be sold across state lines]. This is of course an odd policy approach for Republicans, because they are essentially calling for federalization of insurance regulation in lieu of continued state regulation.

And, of course companies are often licensed in many states. So, Company X can sell policies in whatever states they choose to do so in.

I think the biggest problem with the notion that allowing purchase of policies across state lines is no panacea goes like this. If I call up a company in Kansas and say will you write me a policy, I th ink they will say fine, so long as you come to Kansas to get your health care. Because they wouldn't have provider networks in North Carolina. And one reason rates may be lower in one state compared to another is that practice patterns and cost variations are large and difficult to explain.

Of couse, the same insurance company may well be selling insurance in my state and I can buy from them. Just probably not at the same premium, again because of differences in use patterns and the like in different states.

Tuesday, October 13, 2009

Senator Snowe, Aye

She votes in favor of Baucus bill that clears finance committee 14-9.

Piece on improving Baucus

Frank Hill and I have a piece the New Jersey Star Ledger and tomorrow in the Philly Inquirer proposing 3 suggestions to amending Baucus. All are designed to try and improve cost saving aspects of the plan. Frank and I start from different places....but have found much in common, often driven by our worries about the national debt and its impact on our children. Frank was the chief of staff for Alex McMillan (a repub congressman from charlotte) and for Elizabeth Dole from 2002-04.

Monday, October 12, 2009

Things that make you go hmmmmm

So, late last week, the word of intensifying lobbying to dump the Senate finance committee's tax on high cost insurance plans was not surprising. Such a tax would be passed on to consumers; that is the point of it, to cap the amount of tax free income workers could get via the tax exclusion of employer paid insurance premiums, leading to some reducing the amount of insurance they hold.

And there were grumbles that the 94% coverage rate of persons in the US legally was lower than what had been expected by the insurance industry (96-97% had been the figure used in discussions that encouraged them to hold their fire over the summer). And the reduction of the penalty for indivdiuals violating the new individual mandate made insurers unhappy. After all, they were holding their fire and supporting reform in the non-group market because they would be getting millions of new customers that the insurers had been unable to sign up. Keep in mind there are only 14 Million individual market policies in force in the US (out of 307 Million people) and that CBO says Baucus will produce on the order of 27 Million folks buying individual purchase plans via the exchanges.

Yesterday the grumbles erupted into a War ruining the Columbus Day holiday for.....well, the federal gov't is the only group that gets off Columbus Day. But, this report released by PriceWaterhouseCoopers on behalf of the Assoc. of Health Insurance Plans (lobby group for for profit for profit insurance firms) argues there are four provisions in Baucus bill that could increase private insurance premiums above what they would be under no changes:

*weakening of individual coverage mandate (fines were decreased in the Baucus markup)
*tax on high cost insurance plans
*cost shifting of Medicare cuts to private insurers
*taxes imposed on health, pharma, etc.

There are a couple of fairly questionable assumptions in this report. For example, they assume that there will be no behavioral changes associated with the tax on high value plans. In other words, the tax will just be passed on to consumers (which it will) and that consumers will not seek lower levels of coverage. There is no way that is the case.

Second, they assume that the totoal value of reductions in planned Medicare payments will be 100% shifted to private health insurance. Austin Frakt is the clearest writer on this topic. And the phrase cost shift is used often (not on in this report) when in fact people describe price differences.

And Jon Gruber has answered this report (link to the word file of new analysis embedded in post by Ezra Klein) now with an analysis that counters and argues that premiums will be lower for those in individual purchase market under Baucus compared to no change. I would need to look carefully at the details of both analyses to render full judgement about relative reasonableness.....but Jon Gruber has only his credibility to 'sell' and he is one of the best health economists in the country. And the health insurance industry has insurance to sell and much to gain....they are really getting quite alot of new customers under Baucus....but they say they need more to make the insurance market reforms actually work (no pre-existing and the like). At some level I follow this logic, a key aspect of community rating is that you get everyone in and spread the risk broadly, etc.

But, what I really don't follow is the politics of putting this out now. Late last week after the score and early in the weekend, the Dems seemed to be starting the devolving into a House-Senate war whereby the tax on high cost insurance would be junked in favor of the income tax increase of the House bills. This would strip the most cost reducing aspect of Baucus (tax on high cost insurance....not as good as straight cap of tax exclusion, but the first limitation of unlimited tax free income for employer provided insurance) and perhaps set up the classic 'can the democratic party snatch defeat from the jaws of victory scenario?'

Just like when the whole guy yelling lie at the Presidents speech helped circle some of the more liberal and more conservative Dems around the President.....the insurance industry fires a shot that probably will rally the Dems again. This might be the only way the tax on high cost insurance policies could be made palatable in the House.

And even though I haven't fully digested the report and would mostly like to see the details of their models before saying it is total hooey, as I read through it over dinner this evening my first thought is that is SCREAMS FOR THE PUBLIC OPTION. It is like their computers got hacked and they sent out the wrong report? The easiest way to get the coverage levels up is to allow a public option, which CBO has said can be done cheaper. The reason cover levels are 94% instead of 96% or 97% is that health insurance is so expensive and they can't afford subsidies to make uptake to those levels feasible and hold to the $900 Billion total outlay standard implicitly set by the White House. And the penalties for not signing up were dropped in response to outcry by liberals and conservatives saying you can't have mandate without making insurance affordable if you are going to go the private insurance route.

In both cases there were allowances being made for the politics of it all.....opposition to public option for persons who were worried that would harm private insurance. But, if they are going to start firing away, then why hold back?

So, count me confused as to what they were thinking in putting this out now. Especially given that the outline of this bill has been fairly clear for nearly a month.

Here is a post (you have to read to the end) that offers a different motive....insurers worried about deals that hospitals and docs got that will hurt ability to control costs and insurance industry wanting broader cost controls. Hmmmm......

Triangle Business Journal Panel on Reform

The Triangle Business Journal is hosting a forum on health care reform on Thursday, October 15, 2009 at the Embassy Suites Hotel in Cary, N.C. The event begins at 7:30am with a continental breakfast. I have the privilege of moderating this panel discussion and the participants will include:

*Bob Seligson, Executive Vice President/CEO, North Carolina Medical Society
*Robert Luddy, CEO, Captive-Aire Systems, Inc.
*Bob Greczyn, CEO, Blue Cross and Blue Shield of North Carolina
*Dr. John Kihm, Internist, Priority Medicine of Durham
*Stephen W. Burris, Senior Vice President, Rex Healthcare

The format will be that each of the above will present remarks. Then there will be questions from the audience which will be written....I will mostly play traffic cop and try and pick questions that contribute to an interesting discussion.

I love the tagline for the event as publicized by Triangle Business Journal

"You do not want to miss this event. Trillions of dollars are at stake."

Saturday, October 10, 2009

Bend the curve?

Good article laying out difficulties is having something in any health reform bill to slow cost growth. HR3200 has almost nothing. The Baucus bill has tax on high cost health insurance plans and a more robust commission to look at Medicare payment rates and coverage decisions. Article talks of the lobbying after getting rid of these two aspects of the Baucus bill.

The tax on high value insurance plans is at least a beginning of ending the unlimited federal subsidy of private health insurance. If that goes out, it will be bad news for any hope of slowing the rate of health care inflation....esp if replaced by an income tax increase. Income tax increase is bringing more money into the health sector, while the tax on insurance is redistributing money already in the system, and ending a loophole that has made several generations of American workers have no idea how much their health insurance actually costs.

A Medicare commission with a bipartisan commission made up of non-govt experts is the only hope of any reasonable changes to Medicare. But, it has got to be real. Excluding hospitals from being addressed by a Medicare commission would make such a commission a farce. [for the same reason that Willy Sutton robbed banks.....because that is where they keep the money....]

As an aside, I wish more Republicans would take the example of Mark McClellan (head of Medicare and Medicaid under GW Bush) and be involved in trying to move this ahead while maintaining or improving the cost saving nature of the bill. If there were even 10 or 15 in the House and 2 or 3 in the Senate, they could have quite a lot of influence, and probably improve the bill and help the country.

Friday, October 9, 2009

New from CBO on Tort Reform

CBO sent a letter to Orrin Hatch (R-Utah) today updating their estimates of what tort reform would do to health care costs. In the past, the CBO has focused primarily on the direct costs of the malpractice system (premiums, claims, cost of administering the system) and have been skeptical about the effect of malpractice on health care use (aka defensive medicine). They say that recent research has provided them with more evidence and they are essentially saying they believe there is better evidence that defensive medicine increases costs.

They discuss the various proposals they have considered over time: (1) cap on non-economic damages of $250k; (2) cap on punitive damages at $500k; (3) allowing defendants to argue that persons have other sources of income/coverage for a harm suffered in determining award and/or causing this to be subtracted from awards; (4) statute of limitation reforms (typically 1 year for adults, 3 for children); and (5) so-called fair-share rule, whereby defendant only responsible for the perentage of the harm they caused.

Their conclusions of what would happen if you had a national imposition of the above.

Effect on direct costs. Malpractice premiums for providers would drop by around 10% nationally. This has taken account of the fact that many states have already enacted some or all of the above, so such savings have already been realized. 2009 total direct malpractice costs which are premiums plus settlements, awards at trial, administrative costs not covered by insurance will total $35 Billion, or ~2% of total system expenditures. So, enacting the above package of reform would reduce total system expenditures via drops in premiums of 0.2% (two tenths of one percent).

Effect on indirect costs. CBO has estimated more action or effect of malpractice on use/defensive medicine, which is where the debate tends to focus and says that if a national package similar to the one above were enacted it would reduce national health care spending by around 0.3% (three tenths of one percent) for a total reduction of $11 Billion in 2009 (out of $2.5 Trillion), or around 0.5% (half of one percent).

The total impact of implementing the mix of policies above over 2010-19 would be to reduce the deficit by $54 Billion (over 10 years). That would be $41 Billion in less spending due to defensive medicine and $13 Billion more in collected income taxes as insurance costs declined a bit and folks got less tax free income (aka premiums their employer pays for their insurance.).

They cite studies that reach different conclusions about whether tort reform would harm patients. Darius Lakdwalla and Seth Seabury say health outcomes would get a bit worse in area of infant mortality....but my colleague here at Duke Frank Sloan and John Shadle conclude there are not negative health impacts of tort reform. Here is a great book Frank wrote with Lindsey Chepke on medical malpractice.

So, $54 Billion over 10 years is real money. But, most of the estimates of savings that are thrown about (the highest I have seen is $200 Billion PER YEAR according to Charles Krauthammer quoting Pacific Institute; or differeing by a factor of 20 from CBO) are very much overblown.

I would still be for a malpractice reform, as I have said in the past here, here, and here. But, it won't save that much money, but would save some.

Today's Column and What Next?

Today's column is about what the Baucus plan represents culturally: one last chance to see if private insurance can work to get us to universal coverage in an affordable manner. And the Baucus plan is quite similar to the Chafee plan offered in what was once considered a moderate Republican alternative is the vehicle to move ahead when the Democractic party holds the White House, 60 seats in the Senate, and a big majority in the House. There actually has been some bipartisan health reform has just all taken place within the Democratic party.

There is a lot of chatter about a public insurance option that would be national in scope, meaning offered through exchanges in all states, unless state opted out. Sens. Schumer and Carper are driving this, and Howard Dean and Sen. Ben Nelson (Colorado) both seem to be supportive. Dean and Nelson are both mammals, but that is about it.....they are also both Democrats, but they demonstrate how much political diversity exists in the Democratic party. And if they are both for this, well, seems a pretty good chance. Republicans will have to oppose state options/rights to be against this....which I am sure they will be (gov't takeover and all that). But, really, they are running out of effective arguments because their lines of attack have been so fully played already. This might be what raps up Nelson to vote to break a filibuster and then allow him to vote against the bill in the Senate. Blanche Lincoln and other conservative Democrats, who knows? At this point, the only way to snatch defeat from the jaws of victory for the Dems is to blow everyting apart over the income tax increase (house) v. tax on high value insurance policies (senate). But, if they can't work that out, you really have to say the Dems will have shown themselves unable to govern.....and if they can't close the deal now, what is the point of the Democratic party?

In the, I am as dumb as I look category, I counted public option as totally dead for the past month, and have been saying so, but I appear to have been wrong.

Most interestingly for those of us in the Tar Heel state (I work at Duke but went to UNC--3 times, so it doesn't bother me to write those words), what would happen in North Carolina under this public option/opt out approach? Would we opt in, or out?

Many might assume since the Democratic party controls everything in N.C. we would opt in.....but I would suspect that Blue Cross/Blue Shield NC would lobby for the state to opt out and I wouldn't bet against them. I don't know they would be opposed for sure, it is just my guess.....

Thursday, October 8, 2009

Finance Committee Vote on Tuesday

says the New York Times. The lobbying and jockeying should get serious now. The hospital trade groups said their 'deal' with the Obama Administration on reductions in DSH payments hinged on 97% coverage....whereas this is projected to produce 94%. Essentially the deal was for them to hold their fire over the Summer, in return for a proposal that reduced uninsured rates, and therefore changed charity care into paid care. How loud will they squak about this? Not sure. Ways to move the coverage levels up would include:

*increase subsidies, but you have to pay for it [have I mentioned that capping the tax exclusion of employer provided premiums at the national mean would raise about $300 Bill MORE over 10 for such subsidies AND will greatly increase cost saving nature of the bill]

*public option of some sort would nudge cover up a bit

Other key issues and tradeoffs:

*state-options will likely become important in negotiations as members of Congress start to see bill as more and more inevitable and start trying to find a way to vote for (if they are Dems) and against (if they are Repubs) while maintaing best set of choices possible for their particular state. Most think of state options/opt outs as allowing states to try and do less than what a national approach would entail, but you might well have states like Vermont say they want to try a single payer of sorts. Essentially, states will likely end up with ability to get rid of individual mandate if they can achieve the coverage levels that individual mandate would produce.

*is it too late for a Republican to jump up and say, I am open to supporting, but what this really needs is serious tort reform? Probably not too late. What about some Blue Dogs in the House? Would they trade triggered public option for tort reform? State option for public option? Would the President? [yes and yes in his case, I think].

Wednesday, October 7, 2009

Old v. New Baucus

Interesting side-by-side of the CBO score of the old Baucus bill v. the amended version.

Preliminary CBO Estimate

Just now, CBO says Baucus bill will reduce the deficit by $81 Billion over 10 years, with total outlays of $829 Billion over 10. Estimated to cover 94% of persons in nation legally.

NY Times coverage.

All aboard....

4 Senators

Interesting piece outlining the worries/concerns of 4 Senators who are publicly undecided about Baucus, and their reasons. Olympia Snowe is worried that mandated insurance is not affordable. Jay Rockefeller is worried that the plan it too much of a giveaway to the insurance industry. Ron Wyden is worried that most people will not have access to the exchanges and that too few have much choice of insurance coverage. And Blanche Lincoln is worried about whether the govt can afford it (and about getting re-elected).

It has been mighty quiet this week. That should all change soon. Either Senate Finance is scurrying to pare down the bill if CBO score says it adds to the deficit....or the train will start to roll and the opponents will have to amp up the opposition or try and jump in late and try and modify the bill if they see it as inevitable.

Saturday, October 3, 2009

Text of amended Baucus bill

is here if you don't have anything to do this weekend.....

Friday, October 2, 2009

Big Picture

Now that the Senate Finance committee appears ready to pass a bill, it seems likely that a merged reform bill will come to the floor in the Senate. The House is discussing what to do, and they are clearly looking ahead at a potential conference committee and deciding how to alter what has already been passed.

The big questions/hard decisions.
1. How to pay for it? The House has an income tax increase that the Senate never even considered. The Senate has a tax on high cost premium health insurance plans. The Senate approach has several things going for it and I expect it will win out. 1. It redirects money already in the health system. 2. It should actually have a chance to slow health care cost inflation. The tax will be passed on to consumers, but that is the point; to lessen over-insurance which helps drive cost increases. I would prefer a more aggressive capping of the tax exclusion. Sen. Carper had an amendment along these lines in the Finance committee and I am not sure if it was ever voted on or not.

2. Cultural Symbols. One of the most interesting aspects of reform this time around has been to watch the Dems get their legs under them in arguing for choice and competition. These are two of the most powerful cultural symbols in our nation. And the Dems are making this the centerpiece of their plan. Exchanges are markets that allow people to choose their insurance plan and to have insurance companies compete for their business. Competition is the main way that the Baucus bill says that costs will be constrained. Add into that the argument that indivdiual responsibility is the reason behind an individual mandate, and the Dems are essentially making the arguments that Repubs made in 1993-94.

The main Repub cultural symbols are government takeover of health care, and socialism. At some point the words get used so much for so many things (that people making the charges used to be for) that they lose their sting.

3. Wyden Amendment. Late last night the Wyden Amendment was apparently discussed in the Finance Committee but not voted on becuase the Chairman said it hadn't been scored by CBO. But, Wyden has said CBO says it is budget neutral. This seems certain to come back up on the floor of the Senate. The arugment goes, if we are going to have choice and competition as the way to hold down costs, we need to have more of it. It would seem to me that the House would be able to easily put this (allow people with employer based insurance to choose to shop in teh exchange) into their bill, and therefore get it into a conference.

4. Medicare Advantage. No doubt many in congress would like to take a pass on limiting spending on these....but if you do, you are then looking for over $100 Billion over 10 years to hold the line on budget neutral. I think the fact that this is good policy to stop overpaying these plans (even though it will lead to lower enrollment) will win out in the end....but mostly because it will be hard to make up the lost revenue.

5. Malpractice. The surest sign that Republicans don't want a bill of any type and will stay in full block mode is their not jumping at the opening the President gave them on malpractice. There have been a few speeches and the like....but it will really be interesting to see if Republicans and conservative Dems in the Senate try and put in some sort of failry stringent malpractice reform on the Senate floor.

Of course, one of the tricky issues for Republicans is that this may be more useful as something to complain about than it is to actually address it. Because tort law has always been a state issue. So, this is Republicans saying the federal gov't should over-ride states and enactment tort the same time people like Gov. Pawlenty, who is running for President, is saying that Minnesota may sue under the 10th amendement and say the federal government can't constitutionally pass an individual mandate. Not so coherent.

6. Public Option. Seems dead to me, but will likely come up again. The co-ops idea is weak and not worth much. I would support public option, but wouldn't fight over the co-op. Will be interesting to see if Sen. Snowe pushes on the trigger notion.

7. Affordability. Biggest question is whether insurance actually affordable for those being forced to buy. Cap tax exclusion and kill two birds: add about $250 B over 10 into subsidies, and REALLY do probably put the brakes on non-elderly cost inflation if you cap at the mean. Seems unlikely, but is good policy.

8. State options. There seems to be lots of movement on this front with Wyden and Carper and Cantwell especially open to all sorts of state choices. If you open this up, we could really have some interesting experiments across the nation.

9. Buy across state lines. This is no panacea. If I call an insurance company in Arkansas and ask them to write me a policy (if we make that legal) I suspect they would say, 'fine so long as you come to Arkansas to get your care.' The problem with this as a pass one law and the problem fixes itself is that a major reason premiums differ across states is that rates of health care use differ in ways that are hard to explain. There are probably some common sense changes that would allow bordering states or regions to set up arrangements, but this is no quick fix.

10. Will there be any changes that cause health insurance industry to revolt and oppose? This is one of the most interesting questions to me. Wyden amendement might do it. Would it be too late for them to change? How would they argue that competition is bad (I know it would be for them, but culturally how do you argue it). And why do employers not seem to want out of the insurance buying business as much as it seems like they should want out?

It should be an intersing run until December.

Baucus Mark Completed, Vote Next Week

The Senate Finance Committee completed its work this morning about 2am. The final committee vote will be next week after the CBO renders final judgement on the cost of the bill, and most importantly, whether it remains budget neutral (Sen. Baucus says it will reduce the deficit over next 10 years; CBO said the initial bill would reduce it by $49 Billion over 10 before amendments.

This is an interesting interview by Ezra Klein with Sen. Tom Carper (D-Del), a member of the Senate Finance Committee.

Baucus says he has votes to pass it out of his committee and to the floor, and as he said earlier this week "I can count."

Good Point

A thoughtful and important comment from a reader:

"I read your article in today's, (Friday Oct. 2) News & Observer, regarding medicare + Choice, ( of course now called medicare advantage). Were you aware that medicare by itself does not have a cap to out of pocket spending? Insurance is designed to protect people from large out of pocket expenses, something medicare by itself does not do. Many of the people in these Medicare Advantage programs are the low income.These people who cannot afford a medicare supplement, which does protect people from having large out of pocket expenses. This is the flaw of medicare and I have NEVER read any article that addresses this problem. And it is a problem."

A couple of thoughts. First, yes, I am aware that there is no cap on out-of-pocket expenditures under Medicare....from the hospital deductible of $1,068 to cost share for doc visits, etc. (and of course there are huge out of pocket costs for long term care, a hole in Medicare's benefit structure). It is very bad to be elderly, sick and low income. And there are low income beneficiaries in Medicare Advantage plans. However, if the policy goal is to help low income Medicare beneficiaries deal with out of pocket costs, Medicare Advantage as it exists is not the most efficient way to do that. A would be quite open to means testing Medicare....and financing supplemental insurance for low income beneficiaries from within the Medicare population itself....but there will be lots of blood spilled over that one.

Second, there is a general flaw in the notion of health insurance in the American context, not just in Medicare. Typically insurance means you pay a premium in return for protection against a catastrophic expense. So, that would mean you would know clearly what you would be on the hook for, and at what point you would no longer have to pay. But, health insurance is an odd mix of first dollar cover (things we are trying to encourage, like prevention), partial cover (like co-pays and deductibles that may not count against out of pocket maximums if they exist in a plan), and benefits that max out (like my Duke policy has an annual, and a lifetime maximum; or the common case of limits for types of benefits like mental health).

Here is a quote from an interview with Kenneth Arrow writing about how he got interested in health insurance and health care saying it was when he got his first employer based insurance plan and it covered his care first dollar, but then went away at a certain level of expenditure.

"My first health-care plan as a professor had a $15,000 ceiling. A ceiling? I was thinking that should be a floor! $15,000 I can handle, but above that... it would be a problem."

This let him know things were a bit odd with health insurance American style, and this pre-dated Medicare.

A question: Would it be better to have a Medicare deductible, with a certain out of pocket maximum? $3,000? $5,000? You could have a different deductible based on income?

Today's Column and Medicare Advantage

Today's column in the News and Observer looks at the debate about the legitimacy of cuts to projected Medicare spending to finance subsidies for the uninsured to purchase insurance.

First, it is good policy to cut back payments to Medicare Advantage plans; cost is too high for small benefit increase. Here is a link to the study (by Austin Frakt @ Boston University, and others) referred to in the column. Here is general info about the history of Medicare Advantage and the earlier versions. More general info from HCFO, a program of the Robert Wood Johnson Foundation.

Second, Medicare is commonly used to find savings any time there is an attempt to pare back federal spending on finance a new initiative....for the same reason Willy Sutton robbed banks (that is where they keep the money).

Third, eventually reductions in payment rates to providers (docs and hospitals; not the Medicare Advantage cuts talked about in the article) can have an impact on access to care for Medicare beneficiaries. Medicare needs reforms in how it pays for care as well....but Congress certainly doesn't need to write this line by line. There are some fairly good provisions in Baucus to allow for experiments in payment that will eventually lead us away from fee for service, and toward a more capitated payment system. This both creates incentive to provide good care and shifts some of the high payment risk to providers.

Finally, the notion of inter-generational war pitting Medicare beneficiaries against younger people really misses the fact that we all live in the same country, and we are connected. the younger generations have a responsibility to maintain Medicare to pay for the care of our parents, grandparents, and great grandparents.....and Medicare beneficiaries, esp the coming baby boomers, should realize that there are better and worse ways to do this.....and that those coming after them are there children, grand children and great grandchildren.

Thursday, October 1, 2009

Large varation in post-surgery mortality

New study in the New England Journal of Medicine pointing out large variation in post-surgical mortality (3.5% in low mortality hospitals to nearly double, 6.9% in high mortality ones; risk adjusted). Interestingly, the high and low mortality hospitasl don't differ so much in terms of complications, it is just that there are big differences in likelihood of dying across hospital given a complication.

This points out tremendous quality differences and problems with quality in the US system.

Swiss System

Intersting article about the Swiss Insurance system....universal cover via private insurance (basic plan offered on a non-profit basis) with supplemental plans also offered. The Netherlands and Switzerland are two models with universal cover provided via private insurance, but will mandates and regulations.

A few big differences....employers often pay premiums, but employees are taxed for this, and a fairly high level of co-pay as compared to well (over?) insured Americans. Also, docs who are found by private insurers to be over-prescribing care/drugs can be forced to pay back some of the costs! And docs make less money relative to typical wage within their nation.

So, it is possible to cover everyone via private insurance (Netherlands, Switzerland), but lots of differences between those systems and ours.

Cadillac Plans

Story on what constitutes Cadillac plans...which is important because of the Senate Finance Committees proposal to tax high cost plans (the amount over a trigger, currently $21,000 family, $8,000 individual, but including dental premiums and amount put into flex spending accounts).

I realize I am verging into broken record territory, but a better policy is to cap the tax exclsuion of employer paid insurance premiums. I would cap it lower than what is implied by the current policy (say at the mean, but only for employer paid premiums, $13,000ish family, $5,000 individual). This would raise about twice as much money over 10 years (~$450-$500 Billion v. $215 Billion) and it could be put toward improving affordability of persons being compelled to buy insurance.

The argument goes that as long as we have uninsured persons who would have to pay premiums with after tax dollars, we are simply going to limit the amount of federal subsidy of private insurance that people can have. You can have more insurance, but there is a limit to how much tax free income can pay for your insurance. This will slow health care cost growth, which over time will make insurance more affordable. I realize this makes some people worse off, and I realize they are not all CEOs of multi-national corporations. I also realize that some states are higher cost and people will be differentially affected....but that is part of the point.

I think much of the public has a hunch that the status quo is unsustainable. And that saying this is one (painful) way we are going to change things would be met with some appreciation, even amongst irritation at (some) losing benefits.