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July 26, 2007
The State of Play on S-CHIP
My column today goes into the ideological implications of the fight, but for those interested, over at Tapped, I explain what's actually happening in Congress, and why the bill's passage through the Democratic caucus isn't a sure thing,
July 26, 2007 | Permalink
Comments
Shouldn't you be calling in CHIP, not SCHIP?
Posted by: Joe | Jul 26, 2007 10:55:50 AM
So they oppose providing insurance for poor children because they want to protect the tobacco industry? You have GOT to be kidding me.I CAN'T BELIEVE WE'RE HAVING THIS DISCUSSION.
Posted by: Phil | Jul 26, 2007 10:58:25 AM
I have a question...
Wouldn't the decrease spending on supplementing private insurance companies (from 120% to simply 100%) offset a decent chuck of the cost for expanding SCHIP?
Posted by: Phil | Jul 26, 2007 11:05:45 AM
Yep, that's part of the idea. But it gets a bit trickier because they're also offsetting a scheduled pay cut for doctors in Medicare.
Posted by: Ezra | Jul 26, 2007 11:22:18 AM
Yep, that's part of the idea. But it gets a bit trickier because they're also offsetting a scheduled pay cut for doctors in Medicare.
Hence, the messiness of a single-payer system. I think one of the issues with the debate on this blog, is that while market system problems are rightfully pointed out, the virtues of single-payer are assessed without their associated flaws-- like the one above.
Our government is woefully corrupt-- lobbying is controlling the actual votes here, the ideological rhetoric on both sides is an interesting aside.
Posted by: wisewon | Jul 26, 2007 11:48:59 AM
Our government is woefully corrupt-- lobbying is controlling the actual votes here, the ideological rhetoric on both sides is an interesting aside.
Your idea for health care reform is?
Posted by: Phil | Jul 26, 2007 11:54:52 AM
The scheduled reduction in Medicare reimbursements (10% in Jan, I think), will very likely lead to more MDs refusing to accept Medicare patients. This reduction, and several others in following years was enacted by the Republican Congress under Bush, and was a plain attempt to make both MDs and patients unhappy with Medicare and therefore clamor for private insurance to replace Medicare Part B - the provider part of the plan, which is mostly paid by fees monthly that patients pay each year - and the same insurance industry which the same Republican Congress was giving a 20% premium over Medicare rates.
This is how the Republicans 'level the playing field'. Penalize MDs who accept Medicare patients by a 10% cut in fees they will be paid. Pay the insurance companies 20% (or more) than Medicare costs.
The lovers of free market solutions put not their thumb but their entire arm on one side of the scale and claim private solutions are better than society-wide solutions after they have engineered CENTRALLLY a COMMAND AND CONTROL FROM DC outcome - at the same time they decry the very outcomes they have ordained. It doesn't get much more cynical than this.
Posted by: JimPortlandOR | Jul 26, 2007 11:56:27 AM
Phil,
With respect, read past threads (you can search wisewon from Ezra's side bar if you're really interested). I've said a lot about a different path. In short, extremely oversimplified-- a heavily regulated private-market system that offers UHC, community rating, removes employer link, encourages preventive medicine and focused on encouraging innovation on cost-control methods to best manage the cost-quality tradeoff.
I've said before-- I agree on the problems, its the solution where I'm espousing something very different.
Posted by: wisewon | Jul 26, 2007 12:09:36 PM
Jim,
Let's slow down. Your motives about Republicans could very well be correct, but the cuts proposed are more reasonable than not. Medicare costs are growing too quickly and doctors are 1/5 of expenditures. Along with hospitals, which have already seen cuts in prior years, they are the two biggest expenditures in health care.
So the cuts do need to be made. Blue Cross CA is proposing their own cuts on physicians this week as well-- to levels below Medicare (something that is a long time coming).
Posted by: wisewon | Jul 26, 2007 12:15:31 PM
I favor expansion of S-CHIP. Substantially. But I do not favor paying for it with increased cigarette taxes. If this widely liked program has to go after a pariah group (smokers) for money, what does that say about the nation's willingness to pay for expansion of health programs from the general fund?
S-CHIP was an opportunity to break the taboo about using general funds (and income and wealth taxes) to pay for a worthwhile program. Why not do that?
I would like to know Ezra's position on the cigarette tax aspect of S-CHIP funding.
Posted by: Quiddity | Jul 26, 2007 1:12:53 PM
Phil,With respect, read past threads (you can search wisewon from Ezra's side bar if you're really interested). I've said a lot about a different path. In short, extremely oversimplified-- a heavily regulated private-market system that offers UHC, community rating, removes employer link, encourages preventive medicine and focused on encouraging innovation on cost-control methods to best manage the cost-quality tradeoff.
I've said before-- I agree on the problems, its the solution where I'm espousing something very different.
So you want to just wave the magic wand of regulation and make insurance companies be fair? Your solution seems rather utopian. We'll just make the insurance companies do all the "good stuff" and none of the "bad stuff". Your idea would overregulate private insurers to the point that you would effectively create a government bureacracy equal to or larger than the one you're arguing against. And I can almost gurantee it would be a lot more complicated. It would literally be bureaucrats telling you what you can and can not do.
I only wish the world were that simple.
To be fair I'll look more into your idea but I find it ironic that your argument against government run UHC is that the government is corrupt and filled with lobbyist when in your system corrupt lobbyist would have a field day using technical jargon to limit benefits, decrease care and in all likelihood collect billions of dollars in government handouts.
Posted by: Phil | Jul 26, 2007 1:29:25 PM
I find it ironic that your argument against government run UHC is that the government is corrupt and filled with lobbyist when in your system corrupt lobbyist would have a field day using technical jargon to limit benefits, decrease care and in all likelihood collect billions of dollars in government handouts.
Fair and expected criticism. I would counter that the ability of special interests/lobbyists to negatively impact health care will be more limited when they can only impact regulation rather than the whole system, i.e. regulation a 2 trillion dollar industry leads to less control/influence than actually administering a 2 trillion dollar industry.
As for the model of regulation-- Obama's health care proposal, specifically on this point (I forgot the exact name, but its something like Insurance Exchange/Agency), is a very, very good start.
Posted by: wisewon | Jul 26, 2007 2:09:31 PM
Any comments on Missouri govenor Blunt's health care reform called "missouri healthnet"?
Posted by: Chuck | Jul 26, 2007 2:26:42 PM
Quiddity--
Not Ezra, but I'm gonna chime in anyway. While I agree that if any program could ideologically sway the masses to use general funds on healthcare, it would be S-CHIP, the fact is that even a BIPARTISAN initiative to HELP SICK CHILDREN with funds provided by the MOST POPULAR AMERICAN VILLAIN (the tobacco industry) is being opposed by Bush. Assuming that any healthcare reform is doomed under this administration anyway, I think it's almost better that S-CHIP is funded by a cigarette tax, because it makes Bush's "ideological" stance all the more ridiculous. What I find particularly interesting about this is that it's not a strictly Republican vs. Democrat issue, as Bush is trying to make it out to be. It's a BIPARTISAN plan. Bush is alienating himself from his own party on this one!
Posted by: *e | Jul 26, 2007 3:10:26 PM
To answer Joe's question, it's called SCHIP in the D.C. world, the acronym for State Children's Health Insurance Program. In the states the "S" feels redundant, I guess.
Posted by: flak | Jul 26, 2007 5:05:55 PM
they're also offsetting a scheduled pay cut for doctors in Medicare
What does this mean? A scheduled pay cut should save money. Are they scrapping the pay cut, and need to offset that?
Posted by: Sanpete | Jul 26, 2007 7:55:19 PM
Yes, just like last year.
Posted by: wisewon | Jul 26, 2007 8:54:37 PM
Perhaps Wisewon can offer some clarification on the issue of offsetting the cut in Medicare rates paid to physicians that is otherwise scheduled to take effect next year. My understanding is that the cut is about 10% and is based on a formula under a concept called SGR which stands for sustainable growth rate. The problem, as I understand it, is that utilization has been increasing for years. As utilization rises, Medicare is attempting to control costs by cutting physician reimbursement rates. However, doctors are surprisingly ingenious at figuring out ways to provide ever more services to keep their incomes up. If reimbursement rates are frozen at the 2007 level next year rather than cut 10% per the SGR formula, the CBO scores the five year cost at about $20 billion, I think. That has to be offset under PAYGO rules with tax increases or cuts in other programs (most likely the PFFS segment of the Medicare Advantage program).
Posted by: BC | Jul 26, 2007 10:03:17 PM
Fair and expected criticism. I would counter that the ability of special interests/lobbyists to negatively impact health care will be more limited when they can only impact regulation rather than the whole system, i.e. regulation a 2 trillion dollar industry leads to less control/influence than actually administering a 2 trillion dollar industry.
I actually think its the opposite. Medicare has certainly proven that its hard for republicans to dismantle a giant socialized medicine program.
Also I think its a lot easier to hide loopholes and free market BS in a complex system involving thousands of insurance companies. In medicare everything is centralized in one place so any bill changing an aspect of the system is very obvious, at least comparatively.
I think my point about government subsidies for the private insurances is very important to consider. Government subidies are like a magnet for lobbyists and they're always asking for more. Not to mention the inefficiency that arises between the government and thousands of insurance companies.
The system that you advocate seems eerily similar to the subsidizing of private insurers going on right now that Ezra notes doesn't work and costs more.
Posted by: Phil | Jul 26, 2007 10:44:08 PM
BC,
The cuts themselves were successfully avoided last year by heavy lobbying, the path appears to be the same this year.
Historically, reimbursement has been cut on services that were deemed excessive in a more targeted way-- e.g. cataract surgery, colonoscopy, etc. Physicians have been able to adjust by becoming more efficient in these procedures (there is a little chicken and egg here, as Medicare sees volume/avg. annual income increasing for these they become reasonable targets).
The difference lately has been that the cuts that have been more broad, hitting more specialties across more procedure/service codes. The real game is that Medicare is looking to implement pay-for-performance programs, AMA resists, but when faced with these broader cuts, they have compromised in filling these gaps to accept some P4P. Hence, I personally wonder if these "scheduled" cuts are actually a negotiating starting point to get the P4P dollars included-- with a model that the reimbursement increase physicians can see will come in this form.
Posted by: wisewon | Jul 26, 2007 11:17:57 PM
I actually think its the opposite. Medicare has certainly proven that its hard for republicans to dismantle a giant socialized medicine program.
Phill, this isn't about Republicans, its about special interests-- both sides have them. Private insurance companies are doing pretty well in Medicare-- hence the 120% reimbursement.
The system that you advocate seems eerily similar to the subsidizing of private insurers going on right now that Ezra notes doesn't work and costs more.
Assuming you are talking about the 120% reimbursement as a subsidy, its not remotely similar at all. Based on this post and your earlier one, I don't think you have a good sense what I'm advocating for. I think you are imagining a system where the government runs the whole thing but would allow insurance companies to administer it-- that isn't it at all.
Its really about letting the insurance system work as it does today for those covered by private insurance. The difference is putting regulations in place to ensure the market operates appropriately, i.e. community rating, guaranteeing minimum benefit level in all plans (focused on catastrophic coverage and preventative medicine), data transparency on benefit and claims denials in a digestable format, removing employer linkage, etc.
Posted by: wisewon | Jul 26, 2007 11:27:15 PM
Wisewon,
Thanks for your very thorough answer to my question, which triggers a few others.
Why are doctors so resistant to P4P? The Dartmouth Atlas project has long demonstrated that Medicare spending per person varies enormously by region with no difference in outcomes. It is clear to all who study this that a large portion of healthcare costs / utilization is wasteful, inappropriate or unnecessary. To the extent that appropriate metrics can be developed, hopefully with key input from the medical specialty societies, a lot of this waste can be squeezed out of the system, though I recognize that every procedure represents income for someone.
If P4P metrics start to take hold, do you think doctors may start to reorganize into much larger group practices where they can make much better use of electronic records and other technology? Would the compensation scheme shift to a salary and bonus model from fee for service? Would that be desirable in your view?
I also do not think single payer is the way to go. I would prefer a taxpayer funded voucher approach with community rating, guaranteed issue, mandatory participation, price and quality transparency and widespread use of electronic records. Let the government set a minimum benefits standard. Let the private insurers compete, consolidate, and simplify their offerings. Let those who want it and can afford it buy additional coverage beyond the basic package. It might look something like Medicare Advantage for all where private insurers also have the flexibility to pay providers MORE than the Medicare rate if the Medicare reimbursement is so low that shortages are created like in primary care.
We also need to do a better job in assessing the comparative effectiveness of new drugs and devices in deciding whether or not to cover them. How much should society really be prepared to pay for a new cancer drug that might extend life for a few weeks or months, especially if the patient is in chronic pain because the disease has spread to the bone? The who approach to end of life care needs to be seriously rethought. Just my opinion, of course.
Posted by: BC | Jul 27, 2007 5:13:38 AM
Why are doctors so resistant to P4P?
Doctors are autonomous now, and P4P makes them accountable in ways they don't want to be-- this is the real reason. There is a substantive argument-- P4P, whether you are evaluating docs on process or outcomes measures, take a population-based approach to what's best for patients, where many doctors feel that a best practice approach may not work for a given patient and their judgment shouldn't be "penalized" by P4P. You hear this more from community doctors, those in academic centers understand that best practices are the scientific approach to medicine. A term that brings the lack of autonomy concern and aversion to best practices in one: "cookbook medicine"-- is used pretty frequently as the reason P4P is a bad thing. Its a good thing. FYI-- P4P is being developed with heavy input from medical specialty societies-- which has softened the blow a little.
If P4P metrics start to take hold, do you think doctors may start to reorganize into much larger group practices where they can make much better use of electronic records and other technology?
Yes, and its an explicit design choice among P4P insurers and Medicare. Many of the process outcomes in P4P today are either explicitly about having health IT, or implicitly require it-- they ask for data that would be extremely painful to collect via paper records, where an IT system could collect it 5 minutes. Doctors do talk about the need to be compensated/subsidized to put health IT in place-- this is one way to do it that will promote greater use of P4P in the future.
We also need to do a better job in assessing the comparative effectiveness of new drugs and devices in deciding whether or not to cover them.
This should really be extended to everything in medical care. Cost effectiveness of imaging, surgery, drugs, devices, etc. I would caution two things: cost-effectivess studies are complicated and messy. Small differences in assumptions can make or break a given procedure, and when its all turned into a number, its easy for people to forget/ignore the underlying analysis and you risk it not being revisited and remaining inaccurate. There are still legitimate criticisms about the specific methodologies used to develop these scores. But I love it in principle. My caution, is that while I think many are aligned that this is something that needs to be done-- but the implemntation is tricky because of the nature of it. This is far from an exact science, along with how you translate the differences in cost-effectiveness into incentives/rules for consumers-- there are just a lot of unknowns on how best to make this all work.
This is the biggest weakness of single-payer systems in general. Our toughest challenge is managing the cost-quality tradeoff, and its not clear how best to do it. Single-payer offers one solution to this issue, and it very well will be the wrong one-- we'll never know. Multiple payers allow some experimentation and competition, and the ones that provide consumers the fairest, most accurate and effective cost-quality choices via co-pays, tiers, restricted access, etc. will "win" out or their methods will be replicated by others. That's the nature of competition.
Posted by: wisewon | Jul 27, 2007 7:11:20 AM
I meant to say "it very well MAY be the wrong one..." in the last paragraph
Posted by: wisewon | Jul 27, 2007 7:14:14 AM
Phill, this isn't about Republicans, its about special interests-- both sides have them. Private insurance companies are doing pretty well in Medicare-- hence the 120% reimbursement.
And the vast majority of special interests attempting to disable Medicare are Republicans. And thats not really even the issue. My point is that Medicare serves as a historical example of a socialized health care system holding up well against those who would try to tear it down. Is it perfect? No but its still there and operating well. (Higher approval rating than private insurance companies.) And the 120% reimbursements are a minor aspect of the medicare budget. It’s not multiple billions of dollars in subsidies handout.
Assuming you are talking about the 120% reimbursement as a subsidy, its not remotely similar at all. Based on this post and your earlier one, I don't think you have a good sense what I'm advocating for. I think you are imagining a system where the government runs the whole thing but would allow insurance companies to administer it-- that isn't it at all. Its really about letting the insurance system work as it does today for those covered by private insurance. The difference is putting regulations in place to ensure the market operates appropriately, i.e. community rating, guaranteeing minimum benefit level in all plans (focused on catastrophic coverage and preventative medicine), data transparency on benefit and claims denials in a digestable format, removing employer linkage, etc.No I understand your system, but I think you’re underestimating the effect lobbying would play in your system. So basically insurers have to provide UHC. They’re heavily regulated so they have to accept everyone and pay everyone. Significantly less treatment denials and essentially no denials of coverage. This means that the amount of people they would have to cover would go up exponentially! We’ll they’ll just charge higher premiums and/or have higher co-pays. Uh-oh, can’t do that because of government regulation. We’ll the new people who come on are paying their fair share. Uh oh…no theyre not. Because now instead of covering fairly healthy people we’re covering all of the really really sick, IE really really REALLY, expensive people. We’ll just make them pay astronomical rates. Uh-oh we can’t because 1. they can’t afford it and 2. Our buddy government regulation says that’s not cool. Oh and by the way a significant amount of the new people we’re covering are poor and we’re being forced to provide affordable insurance for them. Gotta lower their prices.
So what do insurance companies do? Hire a powerful lobbying organization. To block your bill from passing. But lets assume it does pass. This multi multi multi million dollar lobbying effort gets billions and billions of dollars in government subsidies up front. And the more inefficient the system becomes the more money they get in govt subsidies. But not only that, over time this complex inefficient bureaucracy gets secretly dismantled one complicated step at a time ensuring shitty coverage and low benefits for all Americans.
Posted by: Phil | Jul 27, 2007 9:55:43 AM
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