Network News

X My Profile
View More Activity

Sneaky cost containment

Jon Kingsdale, director of the Massachusetts health insurance exchange, begins by saying, "I'm not so much of a policy wonk. I'm more of an administrator." And he's got an administrator's practical insights:

If you're going to do health-care cost containment, it's going to have to be stealth. It's going to have to happen before any of the players understand what's happening.

By Ezra Klein  |  October 27, 2009; 9:47 AM ET
 
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Ron Wyden: 'There is an exchange that works.'
Next: Book titles

Comments

Yeah, lie to everyone and implement a new policy before they realize what is happening. And you wonder how the tea party organizers gain supporters??? It is because so called reform advocates openly announce:

"If you're going to do health-care cost containment, it's going to have to be stealth. It's going to have to happen before any of the players understand what's happening."

How difficult is it to see the Liverpool Pathway as the end point these people are working toward?

Posted by: WoodbridgeVa1 | October 27, 2009 10:08 AM | Report abuse

I happen to agree with Kingsdale's comment but am frightened by it at the same time. Good administration and good public administration are two different beasts: stealth is a good tactic in private business but is not so good when government is involved.

As an example, I happen to agree that spending money to prosecute marijuana possession is wasteful; however, marijuana possession is currently illegal. If I were a prosecutor, it would be inappropriate for me to simply ignore the law: elected legislators (and presumably, therefore, a majority of the voting public) have decided that the job of a prosecutor involves prosecuting marijuana possession.

So, what if a health care administrator unilaterally decides to use "stealth" to eliminate health care for the elderly -- to strip one class of the population of legislatively-enacted benefits "before any of the players understand what's happening"? This is Robin Hood behavior (robbing from the rich to give to the poor) which some might applaud... but it's still criminal.

Kingsdale's remarks are among the most honest so far: a hidden agenda can be foisted upon the public "before any of the players understand what's happening". Historical analogies are left to the reader.

Posted by: rmgregory | October 27, 2009 10:35 AM | Report abuse

I don't know if I agree with that. People generally want to help out.

Patients have been pretty reasonable about trying generic drugs. (They are less willing to forgo MRIs, which means we probably just need Japan's $100 MRI.)

Doctors mostly recognize the need to save money and subsidize preventive care. Some are ferociously opposed, but that is a minority.

Systemically, we need to improve integration and switch to government-administered payment rates.

Posted by: bmull | October 27, 2009 10:56 AM | Report abuse

"If you're going to do health-care cost containment, it's going to have to be stealth. It's going to have to happen before any of the players understand what's happening."

There's a long history demonstrating that the players are keenly aware of potential negative systemic consequences from actions taken earlier in the reform game. Industry push-back on comparative effectiveness, pay-for-performance, increasing leverage of public purchasing-- there are plenty of examples across all sectors.

Its frankly telling that one of the leading players in the Massachusetts effort believes that cost control can only happen from a stealth approach. As a reminder, this is exactly the OPPOSITE of what folks favoring the "UHC now, cost control later" approach (like Ezra) had previously stated-- that once everyone was in the system, then everyone would be incentivized to fix it. That wasn't true then, and Kingsdale is saying that it still isn't true. Doesn't mean we shouldn't cover everyone-- we should-- but its also important to be accurate and correct about the reasons why. UHC leading to cost control was never an good argument.

Posted by: wisewon | October 27, 2009 11:23 AM | Report abuse

Really stupid comment. Really bad idea. This assumes you can 'slip something by the patient'. You can't. It will be noticed, eventually. As much as I hate buzz-words-of-the-day, transparency IS the name of the game.

Posted by: scott1959 | October 27, 2009 11:45 AM | Report abuse

oh please stop it with the crap that people will use generics whenever available. If the cost is minimal then they'll pay more for more expensive drugs just like they pay more for more expensive healthcare in general if they're not aware of the costs.

You need to have a fair but recognizable seperation in the employee cost of prescriptions from generic to brand named drugs. If its a couple bucks we'll keep spending on things that aren't necessarily needed.


scott1959,

You don't believe that at some point in the future healthcare will have to be rationed to all. Its being rationed in certain ways in universal countries right now. Right now its rationed on who can pay for it in the US. It may not be in the near future but at some point in the future when systems are overburdened, tax revenues aren't high enough to sustain, rationing will absolutely happen. Those that don't admit that truth aren't being truthful to the entire story and most do it to get their short term fix answered.

Posted by: visionbrkr | October 27, 2009 12:06 PM | Report abuse

*UHC leading to cost control was never an good argument.*

I don't know. In Medicare's original conception, the relative compensation was higher. As Medicare became more widespread, the government was able to leverage its power to demand lower rates. While Medicare Part D restricted the government from demanding lower prices for drugs, in the future, once the pharmaceutical companies are "hooked" on the money they make from Part D, they won't be able to say know when the government negotiates lower prices.

*oh please stop it with the crap that people will use generics whenever available.*

It is true, actually. If you encourage people to use generics, they will do it. Insurance companies caught flak from the drug companies for promoting those ad campaigns, though. Heck, I have a higher co-pay for on-brand drugs, and I, like most people, am concerned about the money in my pocket. You, visionbrkr, seem to have a bunch of unhinged hostility to both patients and doctors, reflecting the typical bean-counter insurance-mindset that patients and doctors are conspiring to take money out of your pockets by getting treatment.

Posted by: constans | October 27, 2009 12:12 PM | Report abuse

visionbrkr...I am not sure how you got that 'I don't believe health care will have to be rationed' out of my comment.....especially since a few days ago I explicitly agreed with you that the mentality of 'we should get whatever we want whenever we want it' will come to an end at some point in the near future. I completely agree that countries with universal health care ration. I do believe they ration more equitably and humanely, however, than the way we do it...rationing by ability to pay.

Posted by: scott1959 | October 27, 2009 12:52 PM | Report abuse

"I do believe they ration more equitably and humanely, however, than the way we do it...rationing by ability to pay."

Ultimately, ability to pay decides health care options in all countries. The wealthy simply travel to wherever the care is available and pay whatever the market demands. A more interesting question might be "Why are so many U.S. citizens starting to travel to Costa Rica and India for health care?" Some insurance companies are even willing to pick up the travel costs if the price differntial makes it worthwhile. Why is a U.S. trained doctor using the same equipment able to deliver services so much more economically in these countries?

Posted by: WoodbridgeVa1 | October 27, 2009 1:09 PM | Report abuse

*Why is a U.S. trained doctor using the same equipment able to deliver services so much more economically in these countries?*

Is this a rhetorical question? It's because the salaries of the doctors, nurses, technicians, and administrators in India and Costa Rica are a fraction of the salaries in the USA.

Posted by: constans | October 27, 2009 1:25 PM | Report abuse

scott,

ok. just wanted to clarify that.


constans,

getting past your hostility towards me you don't really answer the question. There comes a point when if the cost to the patient is close enough that the patient will say, "go ahead and give me the brand name". Now I will agree and admit that many pharmacies will automatically substitute generics when available and DAW isn't written on the prescription but I had a client i went to earlier this year that switched to mandatory generics that severely impacted his costs and at least a dozen of the employees came to me at the meetings and said that they were on the brand name and didn't know why they were. Now if they are for legitimate medical reasons then fine, but if not they considered the generic alternative and in turn saved themselves money, their employer money (it is a self insured plan) and the system money. Explain to me constans how that is a bad thing? Is being aware and impacted by costs a bad thing so long as the cost doesn't impact you getting care?

Posted by: visionbrkr | October 27, 2009 1:26 PM | Report abuse

Is this a rhetorical question? It's because the salaries of the doctors, nurses, technicians, and administrators in India and Costa Rica are a fraction of the salaries in the USA.

Posted by: constans | October 27, 2009 1:25 PM | Report abuse

So are you saying doctors are "overpaid" in the US as compared to the rest of the world? That they're gouging the system??? Please explain. I thought you said doctors WEREN'T greedy? How much does the average doctor make in salary in the US??? How much in India/Costa Rica?? How much is the disparity from their salaries to the rest of the salaries in their respective countries???

Posted by: visionbrkr | October 27, 2009 1:35 PM | Report abuse

visionbrkr, what's the monthly salary for an insurance broker in India?

Posted by: constans | October 27, 2009 1:49 PM | Report abuse

not nearly what it is for doctors here or there. Oh and my salary hasn't increased in 5 years, you know why?

Let me see, I drive a Toyota Camry. I drove into work earlier this year and noted that I saw 3 physician license plates. One was on a Mercedes, One a BMW and one a Cadillac. someone please explain to me WHERE doctors are struggling like the rest of the country with the economy??

Oh and what is the average salary for your profession???

Posted by: visionbrkr | October 27, 2009 1:59 PM | Report abuse

I wish the answers were quite so simplistic. Several factors, including tort systems, regulation, underlying economy etc come into play. But, notice, I said AMERICAN trained doctors. Most of these people could have chosen to remain in the U.S. and earn higher salaries. They chose to return home instead. That in and of itself raises questions.

Also, if the primary factor really is the difference in salaries for health care professionals, than controlling costs in the U.S. is going to be a great deal more difficult than people like to admit. By and large, health care proffessionals in the U.S. are not overpaid. Trying to cut costs by cutting their income will have all sorts of negative consequences.

Personally, I think the answer is a combination of all of the above and patients should be particularly careful about obtaining medical services in countries that allow providers to cut costs on safety. Nevertheless, maybe we should examine some of our regulations and certainly reform our tort laws.

Posted by: WoodbridgeVa1 | October 27, 2009 2:10 PM | Report abuse

Cost containment is a complex problem with many moving parts. In some areas Drs are pretty mercenary and look on patients as just potential profit centers. In other areas it is not so. Hard to generalize, but where costs are too high it is generally because of overcharging and overtreating and duplication of facilities.

End-of-life care is one area with great potential savings but that debate is completely poisoned for a genreation. Personally, I don't think we need insurance cos except for cadillac plans for the rich to supplement basic, quality care. And of course just because you pay more, you don't necessarily get more or better quality. That goes from wine to prostitution to lawyers to drs to financial advice to everything in our society.

Posted by: Mimikatz | October 27, 2009 3:01 PM | Report abuse

*I said AMERICAN trained doctors. Most of these people could have chosen to remain in the U.S. and earn higher salaries. They chose to return home instead. That in and of itself raises questions.*

The fact that there is anyone left in Michigan raises some interesting questions as well.

I assume we have a few factors in play: first and foremost, the number of physicians that foreigners patronize in India and Costa Rica is amazingly small. Almost all "medical tourism" takes advantage of foreign-trained physicians. Next, the relative standard of living for physicians in India or central america is much higher that in the USA. I have never met an American doctor with full time servants, outside of retaining the occasional nanny. Next, this lifestyle is affordable without the bone-crushing hours pursued my many American doctors. Finally, getting back to the Michigan example, people just like being near their families in their home countries.

*Nevertheless, maybe we should examine some of our regulations and certainly reform our tort laws.*

... and the entire conversation from WoodbridgeVa1 was leading up to this answer which is, coincidentally, the Republican answer to every single policy issue that ever comes up in any field in all situations. Really, you didn't have to waste all of our time if you ewre just going to give us a stock answer.

Posted by: constans | October 27, 2009 3:34 PM | Report abuse

That should read: "the number of *American trained* physicians that foreigners patronize in India and Costa Rica is amazingly small."

Posted by: constans | October 27, 2009 3:36 PM | Report abuse

"Let me see, I drive a Toyota Camry. I drove into work earlier this year and noted that I saw 3 physician license plates."


I call BS on this. The vast majority of states phased out doctor license plates a long time ago. Furthermore, only an idiot would get one because its a magnet for insurance scammers looking to force the "rich doctor" into rear-ending them on the highway and thus forcing a large insurance settlement and a personal lawsuit against the good doctor.

At any rate, doctors billings account for only about 20% of total healthcare costs. Doctor take home pay (after overhead, taxes, etc) accounts for only 10%. That means you can cut doctor income IN HALF and only realize a total 5% savings in total costs.

You sound like a jealous little man. Time to look at the facts instead of being jealous that you couldnt make it into medical school and make the "millions" that you claim every doctor makes.

Posted by: platon201 | October 27, 2009 9:56 PM | Report abuse

*I call BS on this. The vast majority of states phased out doctor license plates a long time ago*

It's a selection bias issue: the sort of physicians who get MD plates are the ones more likely to opt for an expensive car. All the ones driving Camrys are the type that wouldn't get an MD plate in the first place, so you don't know a doctor is driving them.

One again, though, this is another symptom of visionbrkr's basic professional jealously of doctors: visionbrkr is desperate, desperate, desperate to prove that as an insurance broker, he's really an "important" piece of the health care infrastructure, when in fact he's just an extraneous, wasteful piece of it that most of us would be happy to be rid of. Whereas we'd never say that about our doctors.

Posted by: constans | October 28, 2009 9:10 AM | Report abuse

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company