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Health Wonk Review for January 31, 2013

Waste, Warnings and the Future

What counts as “waste” in healthcare spending?

On his Health Policy Blog, John Goodman asks “Could Wasteful Health Care Spending Be Good for the Economy?” and proceeds to gives two examples of what he perceives as waste: preventive care without co-pays and wellness exams for seniors – both covered under the ACA.

He’s right: We have no clear evidence that a comprehensive annual physical provides any benefit for an asymptomatic adult.  But apparently Goodman doesn’t know that the “annual wellness visit is not the same thing as an annual physical exam.”

The wellness visit includes no pricey tests. The doctor checks “height, weight, blood pressure, takes a medical history, and records what medications the patients is taking and what other doctors he is seeing.”

The merits of Medicaid cost sharing

As for providing care with low or no co-pays, Brad Wright suggests it is essential – especially for the poor. On Wright on Health, he describes a new rule, proposed by the Department of Health and Human Services that could prove “disastrous” for patients on Medicaid.

“HHS is now attempting to woo states into participating in the Medicaid expansion by allowing them to increase cost-sharing in Medicaid” for all but the poorest of the poor.

Wright cites research showing that when people have to spend out-of-pocket, they are less likely to seek needed medical help. This is particularly true of the poor: even a $20 co-pay may mean choosing between food and seeing a doctor. Thus, “Medicaid has historically limited the amount of cost-sharing that states can impose on beneficiaries.” Now this could change.

Note: This is a proposed rule. The Centers for Medicare and Medicaid will be accepting comments until Feb. 13.

Pain-free cuts to Medicare?

Reining in spending doesn’t mean that patients must suffer. As I write in a post here on, we can trim much of the fat without hurting patients.  Recently, I interviewed Center For American Progress’ (CAP) President Neera Tanden about CAP’s proposals for cutting $385 billion from Medicare spending without drawing blood. Care would not be rationed, and costs would not be shifted to seniors.

President Obama has said he’s open to “modest adjustments” to Medicare. Bloomberg News recently described CAP as “the intellectual wellspring for Democratic policy proposals. CAP”s proposals may offer a preview of adjustments that the president would consider

Flu shots and prescription drugs: dollars down the drain?

  • Managed Care Matters’ Joe Paduda looks at “Flu season and Tamiflu,” and asks “which one’s more hyped?””With the flu season upon us, the media’s in a frenzy. Unfortunately the sensationalism isn’t limited to the illness itself; the enthusiasm for Tamiflu, the equivalent of the mining-after pill for flu sufferers, is similarly hyped.” But Paduda reports, “Turns out Tamiflu actually only shortens duration by a day or so, and while it can moderate the worst of the symptoms,” it’s no cure. He offers links to “the Cochrane Collaboration, perhaps the world’s leading analysts of medical research.”
  • Healthcare Economist’s Jason Sharfrin asks: “Are U.S. drug prices really too high? “He cites a 2013 study which looks at “less regulated countries where average prices are higher” and “a group of more regulated ones where the average price level is lower. This difference is stronger for newer, more innovative products.” But it’s worth noting that we’re “early adopters” of the “new new thing.”

Focus on providers

  • Turning to hospitals, the Hospitalist Leader’s Brad Flansbaum questions the ACA’s assumption that a high rate of hospital readmissions signals waste.Just how many readmissions are preventable? he asks, noting that while “we readmit 20 percent of Medicare beneficiaries 30-days post discharge . . . the majority return within 2-weeks with a different chief complaint.”Flansbaum cross-posts a thoughtful piece by the Incidental Economist’s Austin Frakt which emphasizes that “variation in socioeconomic status and hospital resources play large roles in variation in readmission rates.” The hospitals that are penalized “may be those that can least afford it.”It’s unclear” that Medicare’s current program “is targeting the right thing and measuring it in the right way.” More research is needed.
  • This isn’t to say that we don’t overpay some hospitals. On Health Business Blog David Williams asks: “Why can’t Cincinnati’s hospitals survive on Medicare + 40%”?Under Obamacare, “employers are facing up to the fact” that they “will be responsible for providing health care coverage for their staffers.” Williams observes. “That’s a good thing because it means some will focus harder on innovative ways to get more value for money.”In Cincinnati several employers have signed up for TrueCost, a simple plan that pays providers 140 percent of Medicare rates. The idea is to save the trouble and cost of negotiating with providers.”But hospitals are angry about the plan.” Williams quotes Catholic Health Partners’ Jennifer Atkins: “Every hospital sets their own prices.” (My translation: “we reserve the right to demand as much as we can get. ” Pricing is all about market clout.)Williams goes on to examine whether Medicare’s payments really are insufficient to cover hospital costs.
  • On HealthBeat Blog Dr. Clifton K. Meador, well known for his satirical writing about excesses in the system, offers a guest-post on “The High Cost of Not Listening to Patients.”Meador estimates that 30 percent of chronic illnesses are “psychosomatic.” He stresses that this does not mean “it’s all in your head.” The symptoms are real. Typically, they’re caused by stress at work or at home. By asking questions, and listening, a good PCP can help the patient locate the cause. But too often, patients are fed directly into the specialist system, where specialists are trained to trace symptoms to their particular organ. To a hammer, everything looks like nail.

Ripped from the headlines

  • Health Care Renewal’s Roy Poses has followed “The Tragic Case of Aaron Swartz” from the beginning.  The young computer activist faced criminal charges for downloading thousands of scientific scholarly articles from the site JSTOR. (He was accused of “intending to make them publicly available for free. The articles were already publicly available, but only online through expensive subscription.”)After being pursued by a “tough as nails, relentless federal prosecutor,” Swartz committed suicide. Yet Poses notes, this same U.S. Attorney has been “soft as a marshmallow when dealing with top executives of health care corporations. True health care reform is impossible” Poses warns, “without accountability for the leaders of health care organizations.”
  • Writing on, Bob Vineyard spots danger, not in the private sector, but in government. He quotes Japan’s finance minister suggesting that Japan spends too much on end-of-life care: “Japan’s seniors should ‘Hurry Up and Die.'”Vineyard suggests that as Washington takes over healthcare, the U.S. may adopt a similar attitude. (Given that, 21 percent of today’s voters are over 65, 19% are 55-64, and their political clout is growing,  I don’t see this happening anytime soon.)

The state of state reform efforts

  • Is the money that we’re laying out for Exchanges another example of waste? On Colorado Health Insurance Insider, Louise Norris quotes “Sen. Kevin Lundberg, R-Berthoud, saying he “does not see the Exchange offering anything different than private comparison websites already provide.””The services we’ve been providing to our Colorado clients for the last decade” are similar, Norris acknowledges. . But in the Exchanges shoppers will be eligible for subsidies that should “entice millions of currently uninsured middle-income Americans onto the health insurance roster.”Colorado has a robust insurance market, and has been in the vanguard of reform. Thus, the introduction of Exchanges “might not be as significant as they will be in other states,” she writes,, but “we’re all in this together as a country rather than as a bunch of isolated states.”

Odds and ends

  • Healthblawg’s David Harlow recently experimented with Google+ Hangouts on Air, together with Brian Ahier and Deven McGraw, and they broadcast a one-hour live videochat providing an introduction to the HIPAA Omnibus Rule.  “I received feedback that it was too technical and that it was not technical enough, so I guess we were doing something right. We may do more of these, so if anyone has specific areas of the rule that they think need further elucidation, please let me know.”
  • “One of the tools that businesses are using to manage disruptive health issues like the influenza outbreak is telework” writes Julie Ferguson of Workers’ Comp Insider.  “She reports that 20-30 million people now work at home” at least “one day of the week” and “looks at recent telework trends as well as tools to manage associated risks and ensure worker safety.”


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