The first is a survey released by the New England Journal of Medicine whereby over 46% of Doctors surveys indicated they would be likely to quit if this bill does pass. Granted, it’s one thing to say it and another thing to do it, it still raises a very important point. How do we maintain the quality of our healthcare if even half of these Doctors are true to their word? With shortages in medical staff and adding another 30 million insured people in this country, the thought of rationed care becomes even more plausible.

The second is from a video lecture I saw given by Eric Dishman from Intel (can be found at http://www.ted.com). I realize, being from a technology company could question his credibility, but he did make some good points. He spoke about the fact that in 2011, the first of the baby boomers will start reaching retirement age (assuming we consider the baby boom to have started in 1946), and the number of retirees (65+) will continue to grow at a faster pace than the rest of the population. He argues that regardless of how we pay for Healthcare, if don’t address how we fundamentally deliver care, then effectively, we havent addressed the problem. Of course he speaks about technology as a means of doing this, but I think his point is a good one. The bill does not address the fundamentals of how care is develivered which ultimately affects cost more than how it is paid for or who pays for it.

I would be interested to get thoughts from this community.

Rob

The blog is called: THE HEALTH CARE BLOG
The topic date is : FEBRUARY 14, 2010
The topic title is: HOW MARYLAND “ BROKE THE CURVE”: A SOLUTION FOR
MASSACHUSETTS?

The URL is : http://www.thehealthcareblog.com

This solution would work in any state with the will to tackle healthcare costs. But I’m afraid some states would be willing to go broke before they would embrace such a solution. “Pride precedeth a fall.”

Back the point John brought up, I’ll focus on the issue of obesity. I live in the Kansas City area and recently heard a report done by our local Fox affiliate that stated roughly 1/3 of Kindergartners in metro KC schools were overweight or obese. For 5th graders, that number is over 40%. And for adults almost half!!

I hadn’t really thought about the significance of these figures until I started paying attention to the children at the elementary school two of my boys attend (ironically they are in 5th grade and kindergarten), and noticed how many of the kids were overweight (and asking myself how the parents could allow that to happen). I also notice this with the general population in my day to day activities. As John points out, there are numerous health risk factors associated with obesity, and I am sure many of the individuals I see everyday who are overweight are dealing with these issues and are on medications or other treatment plans to deal with these issues.

All that being said, I think overall health and wellness is another important issue (along with the other points) that needs to be considered in this debate. To truly bring down the cost of delivering quality healthcare, we have to identify and bring down those things that drive it up in the first regardless of how we pay for it. I am hopeful that the message sent by the good people of the Commonwealth of Massachusetts is a wake up call for our members of Congress and has paved the way for more well thought out approach to these issues and greater transparency on the debates.

I like many have been on the outside looking
in at the process of healthcare reform with deep disappointment and
skepticism. My assumption is that the politicians will pass a healthcare
bill that they will be both ill understood and ineffective – or worse -
catastrophic in its unintended consequences! In my very superficial
discussions with friends on the topic I have focused my arguments on a
thoughtful interview I heard on NPR that notes that our healthcare reform
is entirely misplaced. The interview with a well regarded
expert notes that a bulk of our healthcare costs are arguably directly
linked to three key areas in the US – obesity, cancer and infant mortality.
I was shocked and embarrassed to hear we are the worst in each of these
categories for a multitude of obvious reasons.

Your letter struck home with its clear message – we have asked the wrong
questions and without the right questions we can not frame or measure the
intended results. How will we measure the success of our healthcare reform
if no one understands the real issues which can only come from thoughtful
dialogue with the right stake holders (consumers and providers)?

While I am regrettably not optimistic about what our political process will
bring, you have inspired me to take a more proactive role. While the list
of questions and issues you describe is long and often overwhelming, I
think we can make great progress if individuals choose one or more of
the issues you note and dedicate their time and resources to improving one
of the underlying issues that seem to be too difficult for politicians to
deal with.

To that end, I have recently been inspired by what my children’s
school is doing in the field of school children’s wellness and fitness. We
need a new model for teaching good nutrition and fitness that will
translate into life habits for our children. If child obesity is the
leading cause of diabetes, heart disease and even cancer, why would we not
champion this as a national priority? The metrics are clear and the
benefits easily measurable on a health, cost and productivity basis. There
is huge resistance from obvious groups but in the end if we can start with
changing behavior with our children then I am sure the special interests
will be forced to follow.

Your letter has inspired me to take more of a proactive role in this piece
of the puzzle. I hope others will choose to break what can be an
overwhelming issue of healthcare into pieces that matter directly to them
and take direct action versus leaving it to our politicians who are in my
view in capable of dealing with the complexities of this issue.

Well done! Thank you…

Further, I meant to say that the commission will use fiscal end-of-year reported profit margins of the insurers to set the coming year’s mark-up for the providers. Normally the mark-up is set equal to the insurer’s average net profit margin. This would mean that the providers and the insurers make about the same profit which might be considered fair. If the providers over-prescribe medical services and the insurer costs go up, then the provider and insurer profits will go down together. This should encourage providers to think twice on how they use medical tests, procedures, etc. Of course, there will be a minimum mark-up amount the commission will not drop below as a safety net for the providers.

If insurer and provider profits start climbing, then the State Insurance Commissioner can look at inviting-in additional outside insurance companies to increase competition. If the state insurers are making money, there will be other insurers wanting to compete in the state. Whether to take this action will be up to the elected State Insurance Commissioner. The State Insurance Commissioner will determine if the profits are fair and reasonable and judge the impact on the state’s citizens.

If a state insurer feels that the State Insurance Commissioner may increase competition to lower profits, then one or more of the state insurers can announce premium reductions for the coming year to lower the anticipated average profit margins for both the insurer(s) and the providers for the coming year. This allows the policyholders to participate in these profit gains as well as the insurers and the providers. This spreads the wealth. Insurers who reduce their premiums should increase their state market share unless the other insurers do like-wise. So the insurers have three reasons to spread the wealth.

1. Stop the State Insurance Commissioner from increasing the number of competing state insurance companies.

2. Increase market share in the state to get a competitive advantage over the other competing insurers.

3. Reduce Medical Charge Code claim costs by reducing the average net profit forecast used by the MPSC to set provider mark-ups. The projected annual premium reductions are subtracted from the insurer’s profit margin and the resulting net profit is averaged with the net profit from all other state insurers to determine the mark-up value for the coming year.

Of course, the insurers will want to maintain a reasonable profit margin so they will not give away all their gains. But the elected State Insurance Commissioner will be watching.

The provider’s mark-up value is determined by averaging the net profit of all state private insurers. The average is weighted based on the state market share represented by each state insurer.

The state MPSC can be flexible on how it sets the provider mark-ups, but the method described above is more reasonable and fair than just arbitrarily choosing a mark-up value. The above method subjects all participants to market forces and encourages the prudent use of healthcare services. Healthcare decisions are still between the patient and their doctor.

In summary, the state use of MPSC’s can be implemented now and need not wait on any action from Washington. If MPSC’s are effective in reducing healthcare costs, as they will be, then Washington should not need to go to the extremes now proposed and tax us to death. We need to take a stand and get the ball rolling to establish state MPSC’s.

Nevertheless, we have to be sure that Congress does not slam the door on the MPSC idea through ignorance. Everyone who reads this and agrees should contact their congressional representatives and state governor to tell them that we must have state MPSC’s.

Thank you.

But generally all MPSC’s would need to address costs. The way they would do this is by getting to the core cost of each Medical Charge Code. The components of each code would be examined and a reasonable cost determined. Adding all the component costs together would produce the Medical Charge Code cost. This should be a very good representation of what it costs the medical provider to dispense this medical service to a patient. All Medical Charge Codes billed to private insurance would be examined in this manner. This would be a full time job for a PSC and staff. But the job would be clear and focused.

But due to the large number of Medical Charge Codes, the PSC would examine a subset of these codes annually. The PSC would choose codes that need review or provider groups could request a review. The PSC would standardize the Medical Charge Codes so that doctors and hospitals would use the same codes for all insurer claims.

Once you know the cost of all provider activities, you can determine fair and reasonable prices. The MPSC would adjust these costs once annually for inflation. Only codes that had not been reviewed for a year would be adjusted. Next the PSC would add a percentage mark-up (profit). There is a special way this mark-up is determined. The provider profit margin is determined by insurer profit margin. If the insurer profit margin goes down, the provider profit margin goes down since the MPSC sets the provider mark-up percentage. This will encourage providers to think twice about the overuse of medical services. Also insurers are encouraged to return some of their profit back to policyholders in the form of reduced premiums.

The MPSC publishes all Medical Charge Code prices on its official web site for all to see. The Medical Charge Code price includes reasonable cost X inflation factor (if appropriate) X mark-up percentage. This is all a MPSC has to do unless the state wants to give their MPSC more functions. Notice that the MPSC does not make medical decisions or come between the patient and the doctor/hospital. The MPSC focuses purely on setting a fair and reasonable price on each Medical Charge Code. All state providers would use the same official codes to bill all state private insurers.

Now watch what happens in a state MPSC environment:

1. All provider networks and provider service contracts are eliminated because the MPSC sets the prices and all providers are paid the same for identical services. This increases competition between providers since a patient can go anywhere in the state and use their insurance.

2. New insurers can quickly enter the state and compete with existing insurers once licensed by the State Insurance Commissioner because there is no network or provider service contracts required. This increases insurer competition because the only way for an insurer to increase market share is to have the cheapest policy with the best coverage. The State Insurance Commissioner can determine if the state needs to increase insurer competition.

A state MPSC will reduce healthcare costs and enable each healthcare dollar to go much further. The Federal Government can enact new laws to extend healthcare and help subsidize the disadvantaged while the state squeezes the maximum benefit out of each dollar. This is the way the American healthcare system should work. Can you help get this message to Congress and your state governor. If state MPSC’s were in place we should not have the current healthcare crisis. The state MPSC’s should eliminate the need for a Government Option or a single-payer system.

Thanks.

Ronda