Health Care Reform -- Today's recommended reads...

Three or four items this morning to think about.

Healthcare IT Myths

I'll tell you before you get there, they're selling something called MedKaz™ which is some kind of device used to store or access personal medical records. The idea appeals to me because the idea sounds so practical and simple. It makes sense to me that if the records are with the patient two or three problems are eliminated in the interest of time and accuracy. There may be many Bill Williamses but the one that presents with his own records must surely be the one you're looking for. Moreover, how may records are taking up storage after the subjects are dead? Hello! I don't recall anyone bringing up this question so far. As far as I can tell, medical records, once created, become immortal, even though the subject has gone to their great reward. (I think this has to do with lawyers, but I don't know for sure.)

Eventually cloud computing will be the repository of choice, meaning that a personal medical records access key is all one needs. Something like that little key chain thingie that locks and unlocks you car, except it would call up health records via your closest abailable ISP. Google Health is a good firet step, but I read lately that the technology for that method to be secure is still on the drawing board.

My forecast: a sad conclusion to the health care bubble...

Before reading this, you need first to have read the next two links. I list this one next because it's freshest this morning, and I already did read the other two links.

Matthew Holt steps back from the fray for a moment and takes a breath. He's not sanguine about the future of health care reform but his mood is not completely dark. I had to do some homework to figure out what he meant by "an Enthovian/Dutch system of rewarding private intermediaries" because I never heard of Alain C. Enthoven, but with a little drilling found out he's one of the long-time warriors of the health care reform cause.

He makes reference to "Presidential and Senatorial timidity" which chaffed my Obamabubble a little, but that's to be forgiven. I can see where someone can accuse the president of stirring up a bunch of shit and tossing the problem to someone else. But over the years (I hate to admit it) some of the most effective bosses I had were people who did exactly that. One big shot came into the building one morning and things were going so well he couldn't stand it. He said "Looks like the same old came old to me. You need to get something going... make something happen!"

Two snips here.

So I think the worse things get on the economy and/or in the system, real reform remains inevitable--probably some coming in the shape of de facto single payer (other than for the 15% at the top) with price controls and fixed budgets. Which looks somewhat like the UK without the pay for performance part. But I still think it’s a few years off.

Sadly, we have probably one shot at doing this right before then--and by right I mean doing two things. #1 Creating a universal social insurance pool which has a dedicated tax base (or at least politically visible cost. And #2 creating anEnthovian /Dutch system of rewarding private intermediaries to ensure providers reduce cost while improving both outcomes and the patient experience.And I increasingly think we're going to have to do those two things effectively at the same time. (I used to think that we could do #1 and #2 a little later.

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My fantasy is that after Obama puts the 20 bankers in a room and beats them to a pulp the way Tom Friedman wants him to, he puts the 50 health care players in a room and does likewise.

Friedman: This is not a test

I saw this when it came out but skipped reading it because it was just another Friedman piece. The whole message is in the first paragraph and I got the point. I didn't read far enough to appreciate his last paragraph.

...I wake up every morning hoping to read this story:

"President Obama announced today that he had invited the country's 20 leading bankers, 20 leading industrialists, 20 top market economists and the Democratic and Republican leaders in the House and Senate to join him and his team at Camp David. 'We will not come down from the mountain until we have forged a common, transparent strategy for getting us out of this banking crisis,' the president said, as he boarded his helicopter."

Is the Healthcare Economy Rightsizing?

Check out the hyperlink address when you go there. The original title was apparently "is-health-care-a-bursting-bubble." I think the original title was closer to the mark, but that's irrelevant . A sub-section of the article uses that tag. Brian Klepper and David Kibbe co-wrote the piece and it was linked by Holt in the other article. His article won't have meaning until you have read this one. Snips...

Health plan enrollment is now like a sieve. At a recent conference of senior health plan executives, all admitted that enrollment had recently dropped precipitously. Some members are switching to other plans. But many more are dropping out because their premiums became unaffordable, or because they've lost their jobs. The execs also agreed that the multiplier used by industry professionals to estimate the number of total lives from employee lives, stable at 2.2 for many years, has plummeted over the last few years to 1.8. If true, that would signal that increased costs have driven fewer businesses to subsidize dependent coverage, resulting in a 20% drop in total enrollment - the casualties would be mostly children here - that is NOT being reflected in the uninsurance surveys. In a related vein, HHS data from before the economic downturn show that only 39% of Florida's small businesses - they comprise 95% of all Florida businesses - still offer health coverage to their employees. This is significantly below the coverage values reported by the Kaiser Family Foundation, which makes it difficult to believe that these dynamics are accurately reflected in the surveys of those populations.

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One of us recently had a 3.5 hour diagnostic procedure at a local hospital outpatient surgery center. The EOB (Explanation of Benefits) from the health plan showed the hospital had submitted a facility charge of just over $13,000 - more than four months of total income for one-third of American households - and the health plan paid approximately $1,300, which means that willing vendors and purchasers agreed that the procedure's market value was 10% of the charge.

But without insurance, we would have been legally responsible for that bill, with the willingness to negotiate utterly at the discretion of the health system. Setting aside the fact that charges are crazily tied to the evolution of Medicare cost reports and grow out of stuffing every bit of possible cost into each charge, the EOB begs three questions.

1. Is it appropriate to add a 1,000% surcharge for the sin of uninsurance. For not-for-profit health systems especially, is it appropriate to do so while receiving a tax break for providing community service?
2. When a provider chooses to pursue a receivable figure that is more than the established market value (as determined through the contractual figure with the health plan), can that effort properly be understood as inflating the market?
3. Can a system maintain stability when it inflates value beyond the means of most of its purchasers ?

The definition of a market bubble is a high variance between the intrinsic value of a product and its market valuation. Bubbles always burst eventually, as inflated market values tumble back towards intrinsic value. We're seeing this with homes and banking stocks. Are we there yet with health care services? Could America's health system collapse?

This dramatically illustrates how out of control the accounting system is for what is carelessly referred to as "costs." I swear, the way not-for-profit people do accounting defies common sense. The use all the right language... budget, costs, balances, receivables, capital expenses, etc... but the meanings and implications are starkly different from the rest of the world.

The time has come when caring for uninsured and under insured people can be accomplished simply by billing government and insurance companies for hundred-dollar aspirin and disposables, not to mention three-minute professional visits billed at a hundred dollars a minute.