Thursday, January 6, 2011

Health Wonk Review: Should Auld Acquaintance Be Forgot?

Cross-posted from The Agenda on National Review Online.

Well, 2010 is in the books, and what a year it was: inarguably the most momentous in health policy since 1965. Now, whether or not that is a good thing remains a matter of spirited debate among your favorite health wonks.

I personally want to thank the contributors to Health Wonk Review for their tireless work. I’ve certainly learned a lot from all of them, especially John Goodman, my nominee for Outstanding Health Wonk of 2010.

The Individual Mandate

This fortnight, Goodman focused on December’s big news: that Judge Henry Hudson of Virginia overturned PPACA’s individual mandate. In a piece entitled, “Do we need a mandate?” he argues that, if we applied the logic of the individual mandate to other aspects of the economy—like life insurance—it would seem ridiculous. Moreover, the reduction in the rate of the uninsured in Massachusetts, he argues, is due to the reform law’s tax and spending subsidies: “only 7.1% of the newly insured in Massachusetts are individuals buying unsubsidized insurance on their own.” Instead of the mandate, Goodman proposes giving a “refundable tax credit of $3,000 to every individual and $7,500 to every family to purchase health insurance.”

Joe Paduda of Managed Care Matters asks, “what happens without a mandate?” His conclusion won’t shock many health wonks: “It would be tough to design a better recipe for disaster for insurers.” Would the Obama White House overturn the various insurance regulations if the mandate was overturned, and avoid this disaster? “To be determined…[health insurers] have few friends left among Democrats, and those friends would be hard pressed to convince the Administration to be nice to an industry that has been anything but to the Democrats.”

I myself have discussed the implications of Hudson’s ruling, both from the standpoint of constitutional law and health policy. My conclusions? On the law, it will all depend on Supreme Court Justice Anthony Kennedy. On the policy, we could have avoided this whole fight by using a limited-enrollment-period approach.

The Role of the States

A number of health care bloggers discussed state-level health policy issues, both directly and indirectly related to PPACA. Peter Suderman of Reason discusses Vermont’s pursuit of a single-payer health care system under newly-elected governer Peter Shumlin. Vermont’s plan is something that both liberals and (non-Vermont-residing) conservatives can get behind, as it will help us understand if “Medicare-for-all” is the solution to spiraling health costs. Suderman, for his part, isn’t convinced.

Louise Norris of Colorado Health Insurance Insider assesses the prospects for the new Colorado health insurance exchange, which is due to come online in 2014. The state legislature will need to pass a bill with “basic guidelines for an exchange,” after which a legislature-specified governing body will “hash out the details.” The bottom line: “It remains to be seen whether Colorado’s exchange will be bare-bones or robust.”

Michael Cannon, on the Cato Institute’s blog, has some advice for incoming New York governor Andrew Cuomo, who is facing a serious, Medicaid-driven budget crisis. Cannon argues that Cuomo “can start [by closing] the loopholes that allow well-to-do New Yorkers to feign poverty on paper so that Medicaid underwrites their care.”

Jason Shafrin of Healthcare Economist gives us an update on employer health benefits in California, via a report from the California Health Care Foundation. Like New York, the state is in fiscal freefall, facing a $28.1 billion deficit over the next 18 months. Health insurance premiums increased by 8.1% last year. The CHCF survey finds that California reflects national trends: the proportion of employers offering coverage is similar to the previous year, but that doesn’t take into account the companies that went out of business. Premiums have risen 134 percent since 2002. Cost sharing is increasing, and the percentage of firms indicating that they are “very likely” to drop coverage went from 1% in 2008 to 4% last year.

John Graham of the Pacific Research Institute, writing for the NCPA blog, touches upon a creative proposal from the Texas Public Policy Foundation that individual states engage in interstate compacts with one another, as a way of circumventing various PPACA insurance mandates.

Austin Frakt and Aaron Carroll of The Incidental Economist consider “how the health reform game has changed.” They argue that key interest groups supported PPACA last year, and oppose repeal now. The Republican House won’t be able to do much to change the law, but the aforementioned state governments will play a big role in how the law is implemented.

The Dismal Science

As I mentioned above, the merits and demerits of the Patient Protection and Affordable Care Act remain a matter of energetic debate. Megan McArdle, in her blog at The Atlantic Monthly, continues her examination of the various positive consequences that PPACA advocates believe will flow from the law. This fortnight, she responds to a recent David Leonhardt piece in the New York Times, in which Leonhardt argues that PPACA “gives people the freedom to take risks,” thereby strengthening Americans’ entrepreneurial drive and improving the economy. McArdle cites data to suggest that the number of new businesses started on this basis is far outnumbered by those lost because existing businesses can’t afford to hire new workers.

Costs, Costs, Costs, Costs, Costs, Costs, Costs

Health wonks never tire of talking about the never-ending problem of rising health costs. However, this fortnight, Brad Wright of Wright on Health has hit the nail on the head, with a beautiful personal essay on one of the key challenges with consumer-driven health care: his struggle to actually find out how much various tests and services cost. “The experience, while costly, taught me…how little patients or providers know about the real cost of health care, and how hard it is for patients to make price-based decisions when the system isn’t designed with that in mind.” Let’s hope the country can make progress on that front.

Mike Feehan, with classic InsureBlog humor, laments HHS’ “intention to ignore the rising cost of medical care.” HHS will require insurers to “disclose and justify any rate increases of 10 perecent or more,” something that had been the province of the states. Feehan argues that this will increase the cost of insurance, by increasing the amount of money insurers spend “responding to regulation.” On the bright side, HHS’ intervention will lead to more public discussion of the fact that the real driver of rising insurance costs is…the rising cost of health care. “So I say, let the rate reviews and debates begin. And I say, the sooner, the better.”

The Health Affairs blog highlights a study by John Kastor of the University of Maryland and Mark Kelley of the Henry Ford Health System in Detroit, entitled “Productivity Still Drives Compensation in High Performing Group Practices.” They ask: why are institutions like the Cleveland Clinic able to provide hospital care less expensively than other prominent institutions? The hypothesis is that Cleveland Clinic’s staff are paid on a fixed salary rather than on a fee-for-service basis. They looked at 12 multispecialty group practices, of which two paid via salary (Mayo and Kaiser) and ten more traditionally. They conclude that the reality is complex: rewarding physician productivity, in the traditional model, can lead to lower costs and higher quality. Quoting one of their surveyed participants, “Simply paying all physicians in the US on a salary basis will not be a panacea for our current ills.”

Robert Book, of the Center for Data Analysis at the Heritage Foundation, revisits the most famous town in health care wonkery—McAllen, Tex.—and asks, “is something wrong with McAllen, Texas, or is something wrong with Medicare?” Book raises an all-too-infrequently raised concern about the Dartmouth data: that most policy analysts assume that “there were no systematic differences between how physicians treat Medicare patients and how they treat other patients.” Book cites a number of other studies that show that variations in private insurance spending do not correlate with those of Medicare spending. Book points out that private insurers are less able to keep payments down, relative to Medicare’s market power, yet have far greater incentives than Medicare to root out fraud.

2010 in Review

Jaan Sidorov of Disease Management Care Blog dissects “the spin in HHS Secretary Sebelius’ Year in Review video.”  Sebelius highlights tax credits to help small businesses in buying insurance; national standards for health IT; community health centers; and new Medicare anti-fraud provisions. In each case, Sidorov argues the reality is less cheery: the tax credits are too small to make a difference; health IT has not been shown to achieve a positive return on investment; community health centers cost more than typical Medicaid clinics; and the new Medicare anti-fraud provisions haven’t led to more fraud convictions.

Julie Ferguson of Workers’ Comp Insider highlights the top news stories of 2010 related to worker’s compensation, insurance, risk and general business, along with some predictions for 2011.


Roy Poses of Health Care Renewal points out a disturbing trend that only worsens as the government sticks its nose into everything we do: federal officials leveraging their high-profile offices into lucrative, multimillion-dollar gigs at large corporations. Poses’ case study is of former NIH director Elias Zerhouni, now at French pharmaceutical giant Sanofi-Aventis. Timothy Carney of the Washington Examiner has been tracking a long list of government aides and officials who have taken industry jobs, in what he calls “The Great Health-Care Cashout.”

Rich Elmore of Healthcare Technology News asks a useful question: “will [electronic health records], unequally deployed, heighten the appalling differences in care quality and outcomes that exist today among races and regions in the U.S.?” He mines data from the Dartmouth Atlas to examine the problem, and expresses optimism that EHR may actually “overcome some of the intractable problems of care coordination.”

David Williams of Health Business Blog is a fan of the Wall Street Journal’s peerless business reportage. However, in the case of a recent article regarding mental health parity, the newspaper “blows it.” The article in question claims that employers are dropping “mental health and substance abuse coverage in reaction to a new law that requires larger plans to treat such coverage the same way they treat coverage for physical ailments.” Williams looks at the data, and finds that the WSJ has the story “roughly backwards.” He hopes this isn’t a sign that the Journal’s reporting is becoming more aligned with its “reactionary editorial page.”

Glenn Laffel of Pizaazz discusses a recent study in the Journal of General Internal Medicine that explores the impact of Facebook on diabetes care. Much to their relief, the authors of the study found “very little evidence of dangerous, misleading, or risky self-medication behavior being supported by Facebook pages for patients with diabetes.” However, inability to verify the identity of the poster…poses a significant problem to the trustworthiness of any single piece of information on [Facebook].” Do we trust individuals to filter this information for themselves, or should physicians and experts be the gatekeepers of information? It looks like technology is pulling us in the former direction.

Julie Rosen of Bedside Manner argues that “open, empathic communication” is the key to improving the influence of evidence-based medicine in physician practice.

On Deck: Joe Paduda

Joe Paduda will host the next edition of Health Wonk Review, on his Managed Care Matters blog. (For a full list of upcoming HWR hosts, visit the Review’s website.) See you then!


  1. IMHO this is exactly the way to host a blog carnival: well-organized classification of the posts, synopsis of each, thoughtful commentary and context, not too cutesy.

  2. Ditto! I think David's captured *exactly* why this is such a great edition. Thanks, Avik, for such an outstanding job, and for including our post.

    And a Happy New Year to my fellow wonks!

  3. This comment has been removed by a blog administrator.

  4. Hi and thanks for the articles - with regards to the state involvement in the world of Therapies, there is a bill that the European Union is trying to pass which will severely curtail the practice of herbal medicine. This all limits the choice and freedom that people have to choose their mode and scope of treatments. There is a link to a petition online -
    Please take a look and see what you think.
    Thanks for the articles above - G

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