House of Mirrors

By Greg Scandlen

So, you think the debate over ObamaCare was frustrating? You ain’t seen nothing yet.

Just as Massachusetts provided a preview of that debate, it is also debuting the coming argument over cost control. An article by Amy Goldstein in the Washington Post  tells us exactly how it will play out.  The internal contradictions are mind-boggling.

She begins by explaining that,

Massachusetts Gov. Deval L. Patrick (D) is trying to “shove,” as he put it, the health-care system here into a new era of cost control.

Yes, “shove,” — kind of like Obama shoved us into his version of Wonderland.

She explains,

The governor’s proposal builds on a surprising consensus among leaders from the state’s insurance and hospital industries, medical society, legislature and governor’s staff who served on a special state commission assigned to diagnose the culprit behind the soaring medical spending. Fee-for-service medicine “is a primary contributor to escalating costs and pervasive problems of uneven quality,” the commission unanimously concluded in 2009.

This, even though it is patently untrue.  Fee-for-service does not drive inflation in health care – or in any other sector of the economy. What drives inflation in health care is the one thing that makes it different from any other sector – third-party payment. Of course, all of those “consensus makers” benefit enormously from third-party payment, so they aren’t about to kill this golden-egg laying goose.

The article also disavows any responsibility the state may have for the unique cost increases in Massachusetts.  It says,

The spending per person on health care is 15 percent higher than the national average — even taking into account the comparatively high wages here and outsize role of medical research and training. The move to near-universal coverage, state figures show, accounts for a sliver of recent increases in insurance premiums, which have soared above inflation. The main reason has been a rapid escalation in prices.

The state is saying, “Don’t blame us, it is the ‘rapid escalation in prices’ that is to blame, not the universal health program.” But why is Massachusetts having a “rapid escalation in prices” that no other state is seeing? Golly. It’s a mystery!

What to do, what to do? I know! We will pay doctors more for doing less!! INSPIRATION! Blue Cross has already begun —

The arrangement is a version of the accountable care organizations that the federal government also is trying to encourage in Medicare. They pay teams of doctors or hospitals a lump sum or what is called a “global budget” for the patients assigned to them. If a team can provide care for less, it keeps some of the savings, assuming it also meets enough of 64 measures of quality that Blue Cross has defined. Today, about one-third of the primary care doctors in Blue Cross’s network are taking part. A half-million HMO patients have been put in them — but not told by the insurer.

The article goes on to say the arrangement is “voluntary,” but voluntary for whom? Apparently not the half-million people who have “been put into them” and not told about it. Is this part of the “shoving” the Governor was so proud of?

Another part of the shoving were the arbitrary denials of insurance rate increases the Governor directed the insurance commissioner to make. The article reports the commissioner rejected 235 of 274 proposed rate increases last year.  Not because costs weren’t going up. The article already said they are. But for crass political reasons, dictated by the Governor who was up for re-election.  What a swell way to run a health care system!

But the article also contains the seed of what a real solution could be. Ms. Goldstein writes:

Attorney General Martha Coakley used new subpoena power to produce a report laying out large disparities in hospitals’ prices and concluding that they are unrelated to the quality of their care, the sickness of their patients or whether the institution is a teaching hospital.

Well, golly, again. If there is a wide variety of hospital prices unrelated to the quality of the care provided, is it possible – just possible – that consumers spending their own money might be able to shop around for the best deal and thereby punish those hospitals that overcharge and reward the ones that provide value?

And is it possible – just possible – that what gets in the way of that is not “fee-for-service” but third-party payment?

Can anyone say – YOU BETCHA!?

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HIT Privacy in Massachusetts

By Greg Scandlen

A friend forwarded this announcement from Aetna in Massachusetts:

Massachusetts recently passed laws requiring that insurance carriers, HMOs, third-party administrators and self-funded plans report certain data on Massachusetts residents covered under Massachusetts contracts to a new All-Payer Claims Database (APCD). The APCD was created and is maintained by the Massachusetts Division of Health Care Finance and Policy (the Division).

All carriers must start submitting member/claims data to the APCD for calendar years 2008 through 2010 by January 31, 2011. Carriers then need to submit data each month, starting in February 2011. We are working with the Division to report this information for you. You do not need to take action for this reporting.

Content of data and its intended use

The data to be reported to the APCD includes, but is not limited to: subscriber and member identifiers; member demographics; race, ethnicity and language information; plan type; benefits codes; enrollment start and end dates; behavioral and mental health, substance abuse and chemical dependency, and prescription drug benefits indicators; and claims-line detail for all health care services provided to Massachusetts residents covered under Massachusetts contracts.

Massachusetts intends the APCD to serve as a reliable clearinghouse for health care cost and quality information for consumers, employers and governments, so they can make health care purchasing decisions. The APCD also will serve as the central repository for all health care claims data for Massachusetts state agencies. The Division will provide the required APCD data extracts to other Massachusetts government agencies. Massachusetts recently passed laws requiring that insurance carriers, HMOs, third-party administrators and self-funded plans report certain data on Massachusetts residents covered under Massachusetts contracts to a new All-Payer Claims Database (APCD). The APCD was created and is maintained by the Massachusetts Division of Health Care Finance and Policy (the Division).

All carriers must start submitting member/claims data to the APCD for calendar years 2008 through 2010 by January 31, 2011. Carriers then need to submit data each month, starting in February 2011. We are working with the Division to report this information for you. You do not need to take action for this reporting.

Content of data and its intended use

The data to be reported to the APCD includes, but is not limited to: subscriber and member identifiers; member demographics; race, ethnicity and language information; plan type; benefits codes; enrollment start and end dates; behavioral and mental health, substance abuse and chemical dependency, and prescription drug benefits indicators; and claims-line detail for all health care services provided to Massachusetts residents covered under Massachusetts contracts.

Massachusetts intends the APCD to serve as a reliable clearinghouse for health care cost and quality information for consumers, employers and governments, so they can make health care purchasing decisions. The APCD also will serve as the central repository for all health care claims data for Massachusetts state agencies. The Division will provide the required APCD data extracts to other Massachusetts government agencies.

So all of the assurance about privacy are out the window. Your most personal detailed information will be collected along with your personal identifiers