Tuesday, July 28, 2009

Health Care for the Blue Dogs

By Jacob S. Hacker
Tuesday, July 28, 2009

The fate of health-care reform hangs on what President Obama and leading Democrats do in the next few weeks. In particular, it hinges on an effective response to moderate Democrats in the House -- known as "Blue Dogs" -- who are threatening to jump ship.

The main worry expressed by the Blue Dogs is that the Congressional Budget Office has predicted that leading bills on Capitol Hill won't bring down medical inflation. The irony is that the Blue Dogs' argument -- that a new public insurance plan designed to compete with private insurers should be smaller and less powerful, and that Medicare and this new plan should pay more generous rates to rural providers -- would make reform more expensive, not less. The further irony is that the federal premium assistance that the Blue Dogs worry is too costly is the reform that would make health-care affordable for a large share of their constituents.

The Blue Dogs are right to hold Obama and Democratic leaders to their commitment to real cost control. But they are wrong to see this goal as conflicting with a new national public health insurance plan for Americans younger than 65. In fact, such a plan, empowered to work with Medicare, is Congress's single most powerful lever for reforming the way care is paid for and delivered. With appropriate authority, it can encourage private plans to develop innovations in payment and care coordination that could spread through the private sector, as have past public-sector innovations.

Increasing what doctors and hospitals are paid by the new public plan, as the Blue Dogs desire, would only raise premiums and health costs for their constituents. It would also fail to address excessive payments to hospitals and specialists that private insurers say they have lacked the leverage to bring down. Offering public plan rates at close to Medicare levels while giving doctors and hospitals the choice of accepting them -- as the House legislation does -- is a way to test the market. If providers accept the rates, as the CBO projects they will, the Blue Dogs will get what they want: lower costs. If not, the bill in the House contains provisions for adjusting the rates, including nearly $10 billion to raise rates in rural areas if an independent study determines that higher rates are needed.

Many Blue Dogs fret that a new public health insurance plan will become too large, despite the CBO's projection that the overwhelming majority of working people will have employer coverage and that the public plan will enroll less than 5 percent of the population. Their concern should be that a public plan will be too weak. A public health plan will be particularly vital for Americans in the rural areas that many Blue Dogs represent. These areas feature both limited insurance competition and shockingly large numbers of residents without adequate coverage. By providing a backup plan that competes with private insurers, the public plan will broaden coverage and encourage private plans to reduce their premiums. Perhaps that's why support for a public plan is virtually as high in generally conservative rural areas as it is nationwide, with 71 percent of voters expressing enthusiasm.

Yet the Blue Dogs have mostly ignored the huge benefits of a new public plan for their districts. They have also largely ignored the disproportionate benefits promised by new federal subsidies for low- and medium-income workers. Right now, large swaths of farmers, ranchers and self-employed workers can barely afford a policy in the individual market or are uninsured. They will benefit greatly from the premium assistance in the House legislation promised for workers whose earnings are up to 400 percent of the poverty line, from additional subsidies for small businesses to cover their workers, and from a new national purchasing pool, or "exchange," giving those employers access to low-cost group health insurance that's now out of reach.

And given that Blue Dogs are worried about the federal cost of reform, they should applaud the House bill's requirement that all but the smallest of employers make a meaningful contribution to the cost of coverage. This will not just raise much-needed revenue. By ensuring that most employers contribute to the cost of insurance, it will also reduce the incentive for employers to drop coverage and let their workers go into the pool, increasing the size of the exchange and the public plan.

Blue Dogs have the future of health-care reform in their hands. If they hold firm to their principles of fiscal responsibility and effective relief for workers and employers in their districts, what's good for Blue Dogs will also be good for America.

The writer is a political science professor at Yale University and author of "The Great Risk Shift: The New Economic Security and the Decline of the American Dream."

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/27/AR2009072701906_pf.html

Monday, July 27, 2009

Health Reform: The Fateful Moment

The New York Review of Books

By Theodore R. Marmor, Jonathan Oberlander


Critical: What We Can Do About the Health-Care Crisis
by Senator Tom Daschle, with Scott S. Greenberger and Jeanne M. Lambrew

Thomas Dunne/St. Martin's, 226 pp., $23.95

Barack Obama has long emphasized the importance of reforming American medical care, both as a candidate in the 2008 election and as president. During the month of June, however, he dramatically increased his efforts to secure major reform legislation by the end of the year.

The President is using his oratorical skills to rally support for reform. In a series of speeches and town hall meetings, Obama made his case for expanding insurance coverage and controlling medical spending. Speaking before the annual meeting of the American Medical Association in Chicago on June 15, for example, he painted a familiar, distressing portrait of a health care system that costs too much, leaves too many Americans without adequate insurance, and too often provides substandard care. The President warned of the dire consequences if these problems were not promptly addressed:

Make no mistake: the cost of our health care is a threat to our economy. It's an escalating burden on our families and businesses. It's a ticking time-bomb for the federal budget. And it is unsustainable for the United States of America.

Yet as the President expands his involvement in the health care debate, health reformers have concluded that time is not on their side. Delay and the President's popularity might well ebb. Congress could become more cautious as the 2010 elections approach. The longer the health care debate drags on, the more time opponents have to mobilize against and foster public anxiety about reform. And with federal budget deficits soaring, the political opportunities to finance expanded health insurance coverage may fade.

....

The full article: Health Reform: The Fateful Moment

Thursday, July 23, 2009

President Obama's news conference on health care reform.

Go to the video.

Read the full transcript.

Here's an excerpt:

If you have health insurance, the reform we're proposing will provide you with more security and more stability. It will keep government out of health care decisions, giving you the option to keep your insurance if you're happy with it. It will prevent insurance companies from dropping your coverage if you get too sick. It will give you the security of knowing that if you lose your job, if you move, or if you change your job, you'll still be able to have coverage. It will limit the amount your insurance company can force you to pay for your medical costs out of your own pocket. And it will cover preventive care like check-ups and mammograms that save lives and money.

Now, if you don't have health insurance, or you're a small business looking to cover your employees, you'll be able to choose a quality, affordable health plan through a health insurance exchange -- a marketplace that promotes choice and competition. Finally, no insurance company will be allowed to deny you coverage because of a preexisting medical condition. I've also pledged that health insurance reform will not add to our deficit over the next decade. And I mean it. In the past eight years, we saw the enactment of two tax cuts, primarily for the wealthiest Americans, and a Medicare prescription program -- none of which were paid for. And that's partly why I inherited a $1.3 trillion deficit.

....

Taxing Health Insurance Premiums and Subsidizing Health Care Providers

Dean Baker
Truthout, July 20, 2009

As a card-carrying economist, I don’t like the unlimited tax deduction for health insurance premiums. It is regressive and just plain bad policy.

Low- and moderate-income people are both less likely to have employer-provided health insurance, and benefit much less from the tax deduction if they do. Most of these families will have no income tax liability. So, if they get a $12,000 employer provided plan, their tax savings will only be on the 15.4 percent payroll tax liability, which would come to $1,850 in this case.

By contrast, if a family earns $250,000, it is in the 33 percent tax bracket. If this family gets a $25,000 policy from an employer, the government is effectively paying almost half the tab, or $12,100. In this case, the government ends up paying almost seven times as much to subsidize the health care of a high-income family as it does for a moderate-income family. That policy is hard to justify.

The full article.

Wednesday, July 15, 2009

Senate H.E.L.P. Committee Passes Health Reform Bill

The Daily Kos Story

Michigan bills target insurers' denial of proper claims

MASON – The state House will hold three hearings this week on legislation to punish insurance companies that wrongfully deny legitimate claims by their policyholders.

The state could fine insurance companies $1 million for denying legitimate claims by policyholders, under legislation House Democrats say will put an end to insurers cheating their customers.

The package of 12 bills also would allow courts to levy heavy fines and charge insurance executives with felonies for encouraging the delay or denial of insurance claims.

Too many consumers are denied claims for injuries or property damages to boost insurance company profits, House Democrats said at one of five press conferences planned across the state.

Rest of article at: http://freep.com/article/20090713/NEWS06/90713046/Michigan-legislation-targets-insurers--denial-of-proper-claims

BREAKING: House Bill Looks Good (So Far)

By Jonathan Cohn of The New Republic

The three House committees writing health care legislation have just released the full text of their bill. And my immediate, admittedly tentative reaction is strongly positive. Once fully implemented, this reform plan will accomplish most of the goals on my mental checklist:

  • Generous subisidies, available to people making up to 400 percent of the poverty line
  • Expansion of Medicaid to cover people making less than 133 percent of the poverty line
  • Guarantees of solid benefits for everybody, with limits on out-of-pocket spending
  • Strong regulation of insurers, including requirements that insurers provide insurance to people with pre-existing conditions without higher rates
  • An individual mandate, so that everybody (or what passes for everybody in these discussions) gets into the system and assumes some financial responsibility
  • A public plan, one that appears to be strong, although I'll reserve judgment on that until I hear from the experts
  • Choice of public and private plan, at first just for individuals and small businesses, but later for larger businesses and--possibly--eventually for everybody
  • Efforts at payment reform, if not necessarily as strong as they could be
  • Investment in primary care and prevention, which is not sexy but potentially important for general health .
Rest of article at: http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/07/14/breaking-house-bill-good-wish-it-could-happen-quicker.aspx

Another article briefly explains major parts of bill, with links to an official press release, with links to summary sheets about each component: http://voices.washingtonpost.com/ezra-klein/2009/07/the_house_releases_its_health-.html

Monday, July 13, 2009

Alex in Ann Arbor, Michigan

I just graduated from the University of Michigan and will go on to teach special education in Phoenix, Arizona through Teach for America. I spent most of my life without insurance because my divorced parents were both self-employed and could not afford health care. When we were sick or hurt, we would call family friends who were doctors to ask for advice and avoid actually going in to the doctor's because of the high costs. When I did finally get health care a few years ago, I came down with appendicitis and had to be hospitalized. I went to the University of Michigan hospital because it was the only one I knew of. When I left the hospital after an overnight stay, I was later sent a bill for $18,000 with the claim that my insurance would not cover any of the costs. My mother's income is below poverty level and I have paid my way through school on my own. To have this $18,000 bill looming over my head was a disaster. The bill has since been reduced, but it is still more money than I can manage to pay on my own.

Alex
Ann Arbor, Michigan


http://stories.barackobama.com/healthcare/stories/12902

The cost of no public option

There's a lot of arguing about the cost of the public option. The plan put forward by the HELP committee, is expected to cost $600 billion. The numbers (plucked from extremely well researched thin air) by the GOP insist the final number will be well above a trillion.

But what does it cost us to not have a public option?

Some of the costs of not having a public option are simple to calculate, but immeasurable in value. Infant mortality rates in the United States are 6.37 deaths/1,000 live births. A sampling of other industrialized nations with public health care finds the United Kingdom at 5.01 deaths / 1,000 live births. Canada at 4.63. France at 3.41. If the United States infant mortality matched that of the United Kingdom, just under 6,000 fewer infants would have died in the United States last year. If we could match France around 13,000 fewer infants would have died.

Let's move to the other end of the spectrum. As of 2009, life expectancy in the United States is 78.11 years. Which sounds pretty good, until you realize it puts us one slot above Albania. For the United Kingdom, this number is 79.01 years. For France it's 80.98. For Canada, 81.23. for the United States, that means about 270,000,000 years lost compared just to the slightly better numbers of the UK. 936,000,000 years lost compared to Canada. Want to stick a monetary value on it? Say that just a fourth of these Americans in their golden years are pulling down 20 hours a week and getting minimum wage to wave you into the local big box or bag your groceries. That's $442 billion worth of time lost compared to the UK. About $1.5 trillion lost if those workers had lived as long as Canadians.

...

The full article:

http://www.dailykos.com/storyonly/2009/7/7/750936/-The-cost-of-no-public-option

Emanuel's Public Plan With Triggers Trial Balloon "Blew Up": Dem Lawmaker

Sam Stein Huffington Post
First Posted: 07- 9-09 04:06 PM | Updated: 07- 9-09 04:49 PM

A leading progressive in the House of Representatives said on Wednesday that she felt reassured that the White House would not pursue health care reform that tied a public plan to worsening economic triggers.

In an interview with the Huffington Post, Rep. Lynn Woolsey (D-Calif.) said that Chief of Staff Rahm Emanuel might have been floating a "trial balloon" when he told the Wall Street Journal earlier this week that a trigger option could be a compromise approach to health care reform. Judging by his interaction with progressives in the House of Representatives in the subsequent hours, she added, it seems that the administration has taken the proposal off the table.

"The president wasn't talking about a trigger," said Woolsey. And when Emanuel floated the idea, she said, "the balloon blew up. He got to the Democratic caucus and he heard loud and clear that that is not what we wanted. And he definitely heard it from myself and the progressives, very clearly, that we're talking about a robust public option."

The co-chair of the Progressive Caucus, Woolsey said that when Emanuel came to meet House Democrats on Tuesday evening -- hours after his interview with the Journal was published -- he did not receive a warm reception.

"He was on the defensive because he got there and he had to explain that what the president really wants is a robust public plan," said Woolsey.

The California Democrat said that she has whipped the progressive caucus in the House and concluded that more than 60 of its members would vote against a health care reform plan that had a public option tied to economic triggers. It is a line in the sand that she and others expressed to Emanuel when he met with his former House Democrats.

"Fortunately, when [Emanuel] left, we knew that he was not going to be out working for a trigger," said Woolsey. "He didn't make excuses," she added. "We [the progressive caucus] have already compromised. More than 90 percent of the progressive caucus would vote today for a single payer system. And so for us to compromise and get behind a really good strong public plan, I mean that's as far as we're going. And I started with that and he said, 'Lynn I know that.' He knows that we're very serious about this."

http://www.huffingtonpost.com/2009/07/09/emanuels-public-plan-with_n_228941.html?view=print


MoveOn.org Rallies Activists Over Public Option Compromise

The Huffington Post | Rachel Weiner
First Posted: 07- 7-09 05:55 PM | Updated: 07- 7-09 08:29 PM

Rahm Emanuel has caused consternation among progressives -- including Sen. Bernie Sanders (I-Vt.) and Howard Dean -- for suggesting health care legislation could come with triggers for a public option. (A trigger would mean a years-long delay between passage of health care reform and the implementation of a public plan.)

Now MoveOn.org is rallying its membership against such a compromise, asking supporters in an email to call the White House and tell them "you're disappointed in Chief of Staff Emanuel's comments."

The full email:

Dear MoveOn member,


President Obama has been speaking out for weeks about the heart of health care reform: a public health insurance option that will lower costs and help cover everyone.


But yesterday, Chief of Staff Rahm Emanuel signaled support for a "trigger" provision--a proposal that would undermine the public option, and put off real reform for years.

This morning the president reaffirmed his support for a public health insurance option. But according to The Huffington Post, Emanuel has been floating the idea of a trigger since January.

Right now, when key committees are finalizing health care legislation, Emanuel's remarks will only embolden conservative opponents of reform. He should be standing with the majority of Americans for a strong public health insurance option--not disastrous half-measures like the "trigger."

Can you call the White House switchboard and tell them you're disappointed in Chief of Staff Emanuel's comments supporting the "trigger"? Tell them voters want a strong public health insurance option--not half-measures like the "trigger."

http://www.huffingtonpost.com/2009/07/07/moveonorg-turns-activists_n_227382.html

Thursday, July 9, 2009

Is Harry Reid Being Helpful?

By Jonathan Cohn, 7.8.09

Full article at: http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/07/08/is-harry-reid-being-helpful.aspx

As my colleauge Jonathan Chait notes over on the Plank, Senate Majority Harry Reid sent a message to Finance Chairman Max Baucus on Tuesday: Enough with the playing nice.

Baucus has been trying for weeks to craft a version of health care reform that could attract Republican support, but the prospects for that have looked increasingly shaky. Ranking minority member Charles Grassley has made it pretty clear he won't support a bill with a price tag above $1 trillion. But at that level, it'd be awfully difficult to come up with a program that promises enough in benefits, subsidies, and regulations to make insurance affordable for all.

What's more, Grassley--who's been under intense pressure from the right wing and his own party's leadership--has indicated he won't support a bill if he's the only Republican on board. So in order to get a bipartisan bill, Baucus would have to get at least one, probably more than one, additional Republican. That'd likely mean gutting the bill even further and, of course, ditching the public insurance option.

As Baucus has strained to accommodate the Republicans, some Democrats on Capitol Hill and at least a few in the administration have gotten increasingly anxious. And it was that anxiety--actually, it as as much frustration as anxiety--that Reid was channeling on Tuesday. He let Baucus know that a bill with too many compromises would lose ten to fifteen Democratic votes. Translation: Don't give the Republicans anything more. If we have to pass this on a purely party-line vote, we will.

Which, as far as I'm concerned, is just fine. Bipartisanship is good but a sound health reform bill is better. If winning over just one or even a handful of Republicans means gutting the bill, it's not worth it. Among other things, as Matthew Yglesias has noted, it's not clear a bipartisan bill would actually be more representative of the country's sentiments than a partisan one.

As it happens, Reid's tough talk could (that's "could," not "will") end up making a bipartisan bill more likely. The more that Republicans believe Democrats are wliling to pass reform on their own--either by maintaining enough party discipline to break a filibuster or by trying to use the budget reconciliation process, in which legislation can pass with a simple majority vote--the more likely Republicans are to compromise. It's possible Reid's show of pique could actually strengthen Baucus's hand for dealing with Grassley, while also strengthening the hand of those on the right--be they individual lawmakers or special interest groups--who would prefer a modestly unacceptable bill to one they really hate.

Still, one thing Reid said on Tuesday is worrisome. In delivering his message to Baucus, he not only warned against giving in too much to the Republicans. He also informed Baucus that any attempt to tinker with the tax exclusion for group health benefits would also cost ten to fifteen Democratic votes.

Democratic opposition to modifying the exclusion is an old story; unions hate the idea, since some of their older and better paid members would find themselves paying higher taxes on health benefits. But it's not just union power spooking the Democrats. Poll numbers show the idea is highly unpopular and Democrats are scared to touch that.

Trouble is, the exclusion also happens to be one of the best ways to raise money for health reform. It can generate a ton of revenue in a way that is highly progressive and hits middle class workers--if at all--very modestly. Even a modest cap, which hit only upper-income workers, could generate $200 to $300 billion over ten years, money that would make a real differece. (Remember, the reason the Finance Commitee was hacking away at benefits and subisdies was an inability to pay for more generosity.)

There are, to be sure, alternatives. Just this week, Citizens for Tax Justice relased a paper outlining how change to the Medicare payroll tax could help pay for reform. Or there's President Obama's proposal, to reduce itemized deductions for upper-income taxpayers.

Either of those ideas could work. But can Reid muster up the votes to support them? If not, then there's no way to pay for expanding coverage.


Administrative Costs in Health Care: A Primer

Full article at: http://voices.washingtonpost.com/ezra-klein/2009/07/administrative_costs_in_health.html

I actually started looking into administrative costs a few weeks ago. But then, as if to prove the prescience of my research, Paul Krugman, Greg Mankiw, Tyler Cowen and a handful of others began arguing about the subject. And I'm not convinced any of them have it right.

Administrative costs are one of the more confusing issues in health-care reform. Start with the term: What counts as an "administrative cost" for a health insurer? We all agree that paying bills counts. But does profit? What about disease management? Advertising? A nurse who dispenses health advice over the telephone?

Hard to say. But all of them get grouped under administrative costs at various times. Indeed, I've spent the last few weeks looking into studies and talking to experts, and there's not perfect unanimity on how to measure any of this. But most seem to think that Medicare's administrative costs are significantly undersold in the public debate. An apples-to-apples comparison would not leave you with the 2 percent of total Medicare spending often bandied about in debate. That doesn't count, for instance, Medicare's premium collection, which is done through the tax code, and thus through the IRS. Nor does it count most of Medicare's billing, which is outsourced -- and this might surprise people -- to private insurers like Blue Cross Blue Shield and listed under vendor services rather than program administration. A more straightforward estimate, according to experts I've spoken to, would be in the range of 5 to 6 percent.

Nor is it easy to measure administrative costs among private insurers. For one thing, which private insurers? When the Congressional Budget Office examined this issue, it found that administrative costs -- including advertising and profits -- accounted for 12 percent of the average insurer's dollar. But that hid substantial variation among insurers. Among employer-based plans, the largest firms had the lowest costs. Plans covering companies with at least 1,000 employees had a mere 7 percent in administrative costs. Those covering companies with fewer than 25 employees spent 26 percent of premiums on administration. And the individual market was a mess: 30 percent.

This tells us a couple of things. First, size matters. The most important predictor of administrative costs is not whether the plan is public or private, but whether it is large. Second, the bulk of these costs are not helping humanity. Some conservative wags have been suggesting that Medicare's administrative costs are too low. But none of those wags, I'd wager, would prefer the small-group market to the large-group market. Others have argued that the difference in administration is that private insurers do an excellent job ferreting out fraud. unless you believe that only holds true for small business insurers, there's no evidence for that claim.

Indeed, there's little argument that large-group insurance plans offer better value than small-group insurance plans. The reasons are obvious enough: Because they don't need to spend as much money on advertising or dealing with brokers or pricing the risk of applicants, large group insurers can spend more delivering efficient medical care. The administrative efficiencies are part of that.

But administrative costs among payers -- that is to say, insurers -- are only part of the story. And they may not even be the most important part. The hospitals and physicians who have to deal with these payers are spending tremendous sums of money too. Hospitals have billing departments. They employ people to argue over claims and navigate the rules of the dozen or so different insurance plans they contract with. And here the experts were unanimous: The problem is that the system is fractured. There's no standardization. Remember the old Tolstoy quote, every unhappy family is unhappy in its own way? Well, every insurer is complicated in its own way. And that complexity costs a lot of money.

As of now, no one I spoke with knew of good data separating the costs of dealing with Medicare and with private insurers. But there are studies comparing Canada and the United States that show a single payer vastly reduces administrative spending. Few think we could achieve those savings today, even if we did convert entirely to a single payer. But there's certainly a level of savings between here and there that we could reach.

It's also important to note that you don't necessarily want administrative costs as low as they could possibly be. Some activities that are considered "administrative" are useful. Disease management, for instance, which accounts for some of the difference between Medicare and Medicare Advantage. Mental health counselors who are available by phone. Good-faith investigations into waste, fraud and abuse. Care coordination. Nurses who use e-mail or telephones to remind patients to take their drugs. Administration is not always wasteful.

But no matter how good you got at slashing administrative costs, they will never be a panacea to the problems of the system. Rick Kronick, a political scientist at the University of California at San Diego, has done some of the best work on administrative costs, and he summed the situation up quite well. "The main question," he said, "is why are health care costs going up at 2.4 percent a year faster than GDP? And most of the answers to that question have nothing to do with administrative costs. The answers are that we do more stuff and have more technology. Even if we could wring administrative savings out of the system, which I'm all in favor of and would be a good thing, we'd still be facing the question of how to slow the rate of cost growth."

By Ezra Klein | July 7, 2009; 5:36 PM ET

Legos, Red Sox, and Those Long Waits in Massachusetts

By Jonathan Cohn - 7.7.09

A video featuring Legos, a shout-out to the Boston Red Sox, and analysis of health care reform has been circulating on the Internet. It comes via Jonah Goldberg at National Review and, I must say, it is extremely entertaining:

[See original post for video: http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/07/07/can-a-pro-red-sox-video-with-legos-be-wrong-sadly-yes.aspx]

But does the video give us a good idea of what health care reform would look like? Not really.

Here's a distilled verison of the video's argument:

  1. People in Massachusetts wait a long time to see a doctor. People in Georgia don't.
  2. People in Massachusetts also pay a lot for health insurance. People in Georgia don't.
  3. Massachusetts in 2006 passed reforms giving almost everybody health insurance. Georgia didn't.
  4. Those reforms are the reason people in Massachusetts pay so much for their health insurance and wait so long to see the doctor.
  5. President Obama wants to pass national reforms that resemble the Massachusetts state reforms.
  6. If President Obama gets his way, all Americans will end up like those cursed people in Massachusetts--paying more for health insurance, waiting longer for care, and, I guess, watching helplessly as their lego figures spontaneously lose their adorable plastic heads.

Q.E.D.

The video isn't the only source of such reasoning. Lots of conservatives point to the high insurance prices and long waits in Massachusetts to suggest that reform is a bad idea. So let's take a closer look at those arguments, shall we?

(Including rest of article here instead of in comments - blog is not letting me post comments)

The suggestion that the 2006 health reform jacked up the price of health insurance misses one inconvenient fact: Insurance in Massachusetts was among the nation's most expensive long before the law took effect. There are a variety of reasons for that. The higher cost of living in New England has something to do with it. So does the heavy concentration of teaching hospitals. (Research suggests that when you have a lot of high-tech hospitals in an area, it tends to create greater demand for high-tech medical services, which drives up insurance for everybody.)

To be sure, Massachusetts has a history of regulating insurance aggresively, at least relative to places like Georgia. And such regulation can, under some circumstances, drive up the price of insurance (in part because it forces insurers to provide better coverage). But even to the extent that's the reason for the high prices in Massachusetts--and, to be clear, it would be one of many factors--that regulation also predated the 2006 reforms.

The waiting time issue is a bit more complicated. Intuitively, it makes sense that giving more people insurance would lead many of those people to see the doctor, crowding the proverbial waiting room and creating long delays for appointments. And there have been widespread anecdotal reports that reform in Massachusetts did just that. But the statistical evidence to support this thesis turns out to be pretty thin.

Consider a recent consulting report by Merritt Hawkins and Associates. Based on a telephone survey of physicians, it found that the average waiting time to see doctors in five medical specialties--cardiology, orthopedics, dermatology, obstetrics/gynecology, and family practice--were longer in the Boston area than any other city surveyed. The precise figure for Boston, 49.6 days, is presumably the source for the 50 days in the video. By contrast, the city with the shortest waits--Atlanta--had just 11 days. I assume that's why the video uses Georgia as its basis for comparison.

But hold on a second. Is there evidence that the Massachusetts health insurance reforms are the reason for the delay? Merritt Hawkins raised that as a possibility in its report--and, again, it's a plausible explanation. But the full survey details don't actually show that: Although Boston has the longest wait times now, it also had the longest wait times back in 2004, the last time Merritt Hawkins asked these questions.

Nor has Boston experienced unusually large increases in waiting times during that period. The delays in Houston, for example, also rose during this period. But there's been no similar expansion of insurance coverage there. For one specialty, obstetrics-gynecology, the wait times in Houston more than doubled--from 20 days to 41 days--which is higher, in percentage terms, than the increase for any Boston specialty.

Oh, and the survey itself isn't the most scientific. In no single city did Merritt Hawkins get more than 20 responses. The results for Boston are based on the response of 18 offices. That's an awfully small sample size--the type from which any sweeping conclusion ought to be immediately suspect.

To be sure, the Merritt Hawkns report isn't the first to suggest reforms led to longer waiting times. A 2008 study by the Massachusetts Medical Society also reported that waiting times grew after the state's health reforms. That study has been cited repeatedly in the press.

But there, too, the data doesn't live up to the hype. The figure that got all the media attention was a comparison of wait times between 2006, when the average wait for an internist was 33 days, and 2008, when the aveage wait was 50 days. But the wait times in both 2005 and 2007 were 47 and 53 days respectively. In other words, the wait time for internist appointments has basically remained stable, at around 50 days, since 2005. The low 2006 number appears to be a statistical anomaly, the sort you might expect from yet another physician phone survey with a modest sample size.

And that's not all. As with the Merritt Hawkins study, the picture gets even more muddy if you go deeper into the report. The Mass Medical Society looked at a wide variety of specialties. Waiting times for about half of them actually went down after the reforms were put in place.

Again, I wouldn't rule out the possibility that reforms did increase the demand for medical services, at least in the short term, leading to longer waits for care. (Healthcare Economist has some smart thinking along these lines.) But the idea that reform massively overwhelmed doctors and hospitals in Massachusetts just isn't supported by these reports--or any other data I've seen.

It's still a funny video, though.

Note: This item will undoubtedly earn me grief from my nine-year-old son, whose love for legos is rivaled only by his worship of all things Red Sox--something he gets from his Dad.

--Jonathan Cohn

A Moneyball Approach to Health Reform

7/8/09 - From The New Republic's health care blog, by Anthony Wright (see below for short bio).

Complete article at: http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/07/08/a-moneyball-approach-to-health-reform.aspx

Yesterday, we had yet another health reform/CBO moment, when a published report indicated that the Congressional Budget Office had scored the House proposal at $1.5 trillion dollars. Both the CBO and the three House committees swiftly denied the report that there was any such estimate.

My first reaction was to react as Jerry Seinfeld would: The cost estimate is not $1.5 trillion...not that there's anything wrong with that! After all, the House proposal looks to be the one that would extend better help to more people while providing a lot more value to health care consumers. If doing health care right costs $1.5 trillion, then that's money worth spending. As Paul Krugman indicated, it's still less than the Bush tax cuts-which were $1.8 trillion, without any of the same health and economic benefit.

My second reaction, to stick with this blog's love of baseball analogies, is one that comes from the book Moneyball, by Michael Lewis. In it, Billy Beane, the general manager of my state's Oakland A's--sorry, Jon, no love for the Boston Red Sox there--exploits the fact that most of his competitors rely on narrow statistics that don't reflect the true worth of players. Instead of focusing on battage average, which doesn't consider the value of walks, he looks at metrics like On Base Percentage (OBP) that capture a fuller range of offensive production. (As they say, a walk is as good as a hit...)

What does this have to do with health reform? Well, right now most of us look at health care the way Beane's competitors were looking at baseball players: By relying on a handful of narrow statistics--primarily, the reduction in the number of uninsured and the amount of money a plan will cost, as determined by the CBO.

Both of these measures are woefully incomplete. It seems to me we need some new (or at least additional) metrics to properly evaluate these health reform proposals.

Every time we mention the impact of a health reform proposal on the federal budget with a CBO score, we should also give an estimate of how the proposal impacts a family budget. Call it the Consumer Budget Impact--the CBI. It would indicate how a family's premiums would go up or down--and how much their exposure to significant medical debt would decline.

True, no single number can capture this. So we may need to come up with a set of numbers and perhaps compile them into an index, the way Dow Jones uses a mix of stocks to demonstrate the performance of the market as a whole. Elected officials should know if John's family at just over the federal poverty level will be able to get coverage--and if we are expecting too much for Alice the 60-year old who is around 400 percent of the poverty level.

Remember, the subsidies in health reform don't simply help the uninsured get coverage; they also help people who already have coverage but are struggling to pay for it. Think of the early retiree who spends over $1,000 a month, and thus over a third of his or her limited income, to keep coverage. Or the underinsured young adult who can only afford the bare-bones, high-deductible health plan. Or the workers who would lose coverage if not for the assistance and new affordable options their employer is being offered.

All of these people are insured, but in a way that is inadvisable and/or unsustainable. Depending on their income, they and millions of others will get help, so they don't have to pay over a certain percentage of their income for premiums to get a standard package of benefits.

When the Senate Finance Committee comes out with its bill, I hope the political conversation concentrates less on the CBO and if they met this arbitrary $1 trillion budget target, and more on IOUs and what would be the impact on family budgets, and how many people are helped, both insured, underinsured, and overstretched.

That's what voters will care about--just like baseball fans know the win-loss record of their team, more than the cost of the team's operations. Both our elected officials and the media need to do better focusing on the score that matters.

--Anthony Wright

Anthony Wright is executive director of Health Access California, the statewide health care consumer advocacy coalition. He blogs daily at the Health Access WeBlog and is a regular contributor to the Treatment.

Tuesday, July 7, 2009

Good blog: HealthReformWatch.com

Just found this blog today, and it looks good: www.healthreformwatch.com/