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Turkey of a Potpourri

By November 25, 2010Commentary

The National Center for Policy Analysis provides excellent traditional economic analysis of health care issues.  The Center put out a brief paper explaining why health spending continues to rise, notwithstanding reform and other efforts made to control that spending.  The primary villain, according to the Center, is the presence of third-party payment, which desensitizes people to the consequences of their utilization.  On average, people pay only 12% of health care costs out-of-pocket.  The Center points out examples of medical services, like cosmetic surgery, which are primarily patient paid and for which prices have been increasing much less rapidly than for those covered by insurance.  Of course, cosmetic surgery is totally elective as well.  It is unlikely people would show the same elasticity in demand for truly needed care.   (NCPA Paper)

Humana announced that it is acquiring Concentra, an operator of occupational health clinics and worksite clinics.  Concentra has a massive footprint and the clinics are a possible site for delivery of a variety of cost-effective health and wellness services.  Does this foretell a wave of payer acquisitions of health care delivery facilities?  It’s doubtful.  Humana has particular troubles because of its reliance on Medicare revenues and profit on those revenues and thus may be more pushed to make a bold move.  Whether it gains any advantage or synergy from this acquisition is questionable.  (Humana Release)

Health and Human Services issued its version of the MLR rule, largely conforming to the recommendations from the National Association of Insurance Commissioners.  HHS did allow health plans to ignore federal taxes in the calculation, which provides some benefit to them.  Overall, this is not a burdensome calculation method, but the limits themselves will undoubtedly lead to a number of insurers exiting various markets.  Agent commissions are still an issue.  And, as we have said before, this regulation creates incentives that are not what policymakers should want in terms of premium increases, spending more on health care and spending less on “administration”.   (HHS Rule)

Several provider groups, including the American Academy of Family Physicians, released Joint Principles for Accountable Care Organizations.  The principles basically suggest that the patient-centered medical home is the appropriate care model for ACOs.  As expected, the principles are oriented toward ensuring physician control of ACOs and flexibility for physicians participating in them.  Transparency, patient engagement and care coordination are emphasized.  In regard to payment, the principles express concern that physicians be appropriately compensated while not subject to financial risk.  In other words, don’t put us at risk for our inappropriate care delivery and concurrent costs.   (ACO Principles)

Another provider group also put out some information that is about what you might expect.  The American Medical Association released results from a survey of physicians to see how they feel about prior authorization policies, which are designed to encourage doctors to interact with a payer before delivering certain expensive services or those which may not have clear use criteria.  Shockingly, most physicians feel that prior authorization is burdensome and risks patient care.  The survey claims that doctors spend 20 hours a week dealing with prior authorization requests, which is simply unbelievable, although there is no doubt that these processes do take up time that otherwise could be spent with patients or drug reps.  One very valid point from the survey is that physicians would find automated processes easier to deal with, but physician lack of good systems is the primary barrier to automation.  Most payers and many third-party vendors have automation available, but doctors’ offices often don’t have the capability or don’t bother to use the automated option.   (AMA Release)

The Journal of the American Medical Association carried an article on how to use research on quality improvement.  This is an extremely valuable type of article, because it helps physicians and other readers be informed and critical consumers of research results.  The article describes various types of quality improvement studies, identifying potential issues with each and providing a list of questions the reader should ask about any study.  The article also suggests how to consider the cost or other consequences of the quality improvement intervention.   (JAMA Article)

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