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NRO’s domestic-policy blog, by Reihan Salam.

Health Wonk Review Review: Democrats in Retreat; Entitlement Reform



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Hank Stern of InsureBlog—a must-read blog for those who want to get smarter about health insurance policy—hosts this fortnight’s Health Wonk Review.

In March, Democrats were convinced that PPACA would gain in popularity after it passed; as Nancy Pelosi famously put it, “We have to pass the bill so you can find out what’s in it.” Contrary to those hopes, the law’s unpopularity has hardened, increasing the likelihood of a difficult November for Democrats. Health care bloggers are wrestling with the implications.

Brad Flansbaum of The Hospitalist Leader is troubled by the tactical retreat of PPACA advocates first reported by Politico, but doesn’t think conservatives would have done much better:

The “new” selling points as outlined in the referenced memo are not minor changes as Igor Volsky or Kate Pickert posit. They read like retractions and timidly portray the law as a less than strident advance. Knowing the foundation for reduced acceptance of PPACA (and for all you revisionists, remember how six months ago, the country would be “loving” it by now) is a combination of fear, unemployment, and everything mentioned above, I realized it was the attacks that still angered me. I do not mean the demagoguery, the feeding of meat to the anti-ACA masses, or the snipes. What I mean is the utter impossibility of anything McCain, conservatives, or the free marketeers could have put on the table enduring the same scrutiny at this juncture in time—and not the claptrap the GOP was pushing last minute. I am talking a fully realized bill from the principled right.

It’s an interesting post, and worth a full read. I don’t fully agree with his pessimism, though. There could have been a bipartisan plan for health reform that achieved many of the goals of both the left and the right, but Democrats saw their 60-vote window in the Senate and decided to go with a partisan, ideological, maximalist strategy. The results are there for all to see.

Bob Vineyard of the aforementioned InsureBlog looks at post-PPACA changes in the Georgia health insurance market, and the results are not pretty: nearly all plans have stopped providing maternity benefits; only a handful are still designing child-only insurance plans; some companies are dropping out of the market altogether; and premiums are going up faster despite reductions in benefits. He concludes: “Given all of this, why is Obamacare so great for the consumer?”

Jaan Sidorov of the Disease Management Care Blog sounds his own warning, by pulling up some interesting academic research that suggests that Obamacare

not only doesn’t address the inability of primary care providers to manage the coming surge in demand and ignores the looming sustainable growth rate formula-driven cut in Medicare Part B physician payments. It also skips over the inconvenient truth that the prevention (and, by the way, treatment) of many conditions, “most notably, obesity” isn’t really all that effective, especially over the short term.

John Goodman has produced a “fair, unbiased, evenhanded” 49-page consumer’s guide to PPACA, entitled “What Does Health Care Reform Mean for You? A Consumer’s Guide.” It describes the main features of the new law in plain English. For those who prefer a briefer summary, Jason Shafrin summarizes the law on one page. (Goodman also produced a pamphlet that can be displayed in doctors’ offices.)

Maggie Mahar of Health Beat has two posts up on the Republican nominee for governor of Florida, Rick Scott. Scott was once the CEO of Columbia/HCA, the largest private hospital operator in the world, which was borne from the merger of Columbia Hospital Corporation and the Hospital Corporation of America (founded by the family of former Senate Majority Leader Bill Frist). In 1997, during Scott’s tenure as CEO, Columbia/HCA was charged with widespread Medicare and Medicaid fraud, ultimately settling the charges for $1.7 billion in penalties, damages, and fines—at that time, the largest fraud settlement in U.S. history. (Scott himself was never charged with wrongdoing, and now says that he was opposed to settling the case.) Mahar’s reports are worth reading, as they will most certainly have an impact on this competitive and significant gubernatorial race.

Rita Schwab of Supporting Safer Healthcare recounts the harrowing story of Taylee Blischke, a baby born at Mission Hospital in Mission Viejo, Calif., who almost died when she was mistakenly given a dose of morphine meant for Taylee’s mother, Jessica, because their IV lines got mixed up. Instead of taking responsibility for this failure, the hospital accused the mother of being a drug addict. The hospital eventually admitted its mistake, in a legalistic and carefully worded apology. The episode is a reflection of our oligopolistic hospital culture: one in which customer service is a foreign concept, because hospitals enjoy limited competition. One of the most important projects for health care reform is removing the PPACA-imposed restrictions on new hospital construction. We need a larger number of smaller, more specialized hospitals that compete with each other within a specific geographic area.

Entitlement reform was also a major focus for health care bloggers. Austin Frakt of The Incidental Economist took on the topic of Medicare reform in a series of posts. He points out that privately-administered Medicare Advantage is a kind of voucher program, one that costs the government an average of 14 percent more than traditional Medicare. Frakt writes, “Given the track record, it is also not unreasonable to conclude the mandatory voucher program [Rep. Paul] Ryan advocates wouldn’t save money either.”

But Frakt is not an opponent of vouchers in principle. His main concern with Medicare Advantage is political; i.e., that insurers under MA don’t have a political incentive to control costs, and that the program is vulnerable to political meddling. Frakt’s own proposal for Medicare vouchers, revolving around competitive bidding, shares many common elements with one published by the American Enterprise Institute, and is worthy of further consideration.

Joanne Kenen of The New Health Dialogue has an interesting piece on an attempt at Medicaid reform in Oregon, centered around forming integrated primary care teams and moving away from traditional fee-for-service care. Oregon’s experience will be relevant to those who hope to use similar approaches to improve Medicare. (Oregon is still trying to recover from a fiscal disaster caused by a poorly thought-out expansion of Medicaid.)

Over at the Health Affairs blog, Michael O’Grady and Jennifer Young propose to rework the complicated Medicaid financing arrangement between the federal government and the states, by having the feds take on a greater share of the funding during economic downturns. While states would, in theory, be required to repay this “emergency FMAP” funding, it’s not obvious that repayment would happen in reality, resulting in a classic moral hazard problem in which profligate states are rewarded at the expense of frugal ones.

Joe Paduda of Managed Care Matters is concerned that Americans are trying to save money by spending less on health care, which will cause more health care problems (and increase costs) down the road.

Ken Terry of BNet’s Critical Condition (not to be confused with National Review’s blog of the same name) is concerned that increased funding for Detroit’s hospitals will increase the cost of health care for that city’s hard-hit residents.

Finally, on an optimistic note, David Williams of Health Business Blog interviews Evan Falchuk of Best Doctors, who is one of the foremost private-sector innovators in the world of employee health benefits. The interview highlights that there are two paths to health care reform: the one that involves legislation from Congress, and the one that involves the private-sector innovation that takes place when Congress stays out of the way.



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