Sunday, May 31, 2009

Weekend Update - Miscellany

  • Word of Senate Health Education Labor and Pensions Committee Chairman Ted Kennedy's healthcare reform proposal leaked last week, and the New York Times promptly and in my view understandably reported yesterday that Kennedy's plan is at odds with the bipartisan plan under development by Senate Finance Committee Chairman Max Baucus. The New York Times reported that
    As a starting point for his bill, Mr. Kennedy favors a public plan that looks
    like Medicare, the government-run program for older Americans created in 1965, when he was a young senator.

    By contrast, Senator Max Baucus, the Montana Democrat who is chairman of the Finance Committee, has been working for months with the panel’s senior Republican, Charles E. Grassley of Iowa, in the hope of forging a bipartisan bill, which would probably play down the option of a public plan.

    Mr. Grassley opposes creation of a new government insurance program and says “we cannot afford the public health plan we have already,” referring to Medicare.

    President Obama has championed a public plan, saying it would help “keep the private sector honest,” though he has indicated he will be flexible on the details.
    House Democratic leaders, including three committee chairmen drafting the House bill, are close to Senator Kennedy’s position.
    I couldn't agree more with Sen. Grassley. Medicare is rapidly going broke, and I fail to understand how health care reform will fix that problem. Moreover, I don't understand the President's point particularly as the bulk of health care fraud is on the provider side. My wife owns a knitting store. Does there need to be a government run knitting store in order to keep her honest? And there is no public plan option in the successful FEHB Program.

    AHIP released a Milliman report last December explaining how Medicare's and Medicaid's low reimbursements to providers shift substantial costs onto the private sector. The study found that cost shifting:
    •Adds an estimated $1,512, or 10.6 percent, to the average premium for a family of four
    •Of this amount, employers pay approximately $1,115 and the employee share is $397
    •Families pay an additional $276 more in coinsurance and deductibles due to the cost-shift
    Nevertheless, according to the New York Times
    Under Mr. Kennedy’s proposal, the government-sponsored plan might pay more than Medicare, perhaps 10 percent more, but less than private insurance.
    Under the House bill, the public plan would use Medicare fee schedules in setting payments to health care providers.
    How will private sector plans be able to compete as providers seek to shift more public option plan costs onto them. And when the public plan option drives the private sector health care industry out of the market as Medicare did in 1960s where will the providers shift costs?

    Today the New York Times reported that Sens. Kennedy and Baucus "issued a joint statement on Saturday saying they would “seek common ground on health reform legislation.” Time will tell. The Washington Post reports that
    A top administration official said the White House expects Kennedy to unveil his bill Monday. A timetable released by Kennedy's office calls for Democrats on the Senate health committee to meet Tuesday, with a bipartisan session scheduled for Friday. Committee markups could begin June 16.
  • Athena Healthcare released its annual healthcare payer rankings, which considers speed of payments, denial rates, etc. -- Humana, Aetna, and Cigna are 1, 2 and 3.

  • And as this is the FEHBlog, it's worth noting that today is deadline for FEHB Program carriers to submit their 2010 benefit and rate proposals to OPM in response to OPM's call letter. OPM expects to complete benefit and rate negotiations by August 14, 2009.

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