Sunday, October 11, 2009

Weekend Update / Miscellany

Late last week, OPM posted its annual, informative benefits administration letter announcing changes to the FEHB Program for the upcoming calendar year. The letter announces new plans, terminating plans, and more.

On Friday, the Washington Post reported on health industry concerns over the health care reform initiatives on Capitol Hill. "One day after Democrats celebrated the news that a bill drafted in the Senate Finance Committee would not increase the deficit, the prospects for speedy enactment of landmark reform grew murkier. Industry leaders, who have held their tongues for months, spoke in increasingly dire tones Thursday about the impact of the Democratic proposals, raising the specter of an eleventh-hour lobbying campaign to defeat Obama's centerpiece domestic policy goal. " The New York Times lead article today concerned lobbyist efforts against strong health care cost cutting measures in the Baucus plan, principally the Cadillac plan excise tax and the Medicare commission. The devil is in the details. The Senate Finance Committee votes on the Baucus proposal on Tuesday.

The Congressional Budget Office sent Sen. Orrin Hatch a letter on Friday projecting that relatively modest tort reforms designed to reduce defensive medicine would save the federal government $41 billion over ten years. I found this section of the letter particularly interesting:
In the case of the federal budget, enactment of such a package of proposals would reduce mandatory spending for Medicare, Medicaid, the Children’s Health Insurance Program, and the Federal Employees Health Benefits program by roughly $41 billion over the next 10 years (see Table 1).2 That figure includes a larger percentage decline in Medicare’s spending than in the other programs’ or in national health spending in general, a calculation based on empirical evidence showing that the impact of tort reform on the utilization of health care services is greater for Medicare than for the rest of the health care system. One possible explanation for that disparity is that the bulk of Medicare’s spending is on a fee-for-service basis, whereas most private health care spending occurs through plans that manage care to some degree. Such plans limit the use of services that have marginal or no benefit
to patients (some of which might otherwise be provided as “defensive” medicine); in that way, plans control costs and keep premiums lower than they otherwise would be. In research reported in 2002, Kessler and McClellan found that when tort reform was introduced, health care spending in regions with relatively more enrollees in managed care plans did not fall as much as it did in regions with relatively fewer enrollees. Presumably, the managed care plans had already eliminated some of the defensive medicine that would otherwise have been diminished by tort reform.

On a related note, Healthleaders Media reported on a survey conducted by a health care provider accreditation monitoring company Medversant. Medversant surveyed over 29,000 physicians, nurses, dentists, podiatrists, and allied health care providers. "18.7% were found to be practicing with one or more of 110 questionable findings, and 8.9% had one or more reports in the National Practitioner Data Base. Of those with problems, 4.6% had one or more license actions requiring review according to accreditation and regulatory standards." 2% were found to be not currently licensed. "The Medversant survey noted that a 2006 report from the National Practitioner Data Bank suggested that practitioners with more than one malpractice payment report 'are responsible for more than half of malpractice payments made, and are one third more likely to have other adverse findings than practitioners with a single malpractice payment report.'"

My best hope for bringing down health care costs over the long term is personalized medicine, which unlocks the benefits of the herculean task of mapping the human genome. Genetic Engineering News features a special report on the unappreciated benefits of personalized medicine in the health care reform debate.

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