2012 Potpourri XXX

By October 12, 2012 Commentary

The Journal of the American Medical Association carries a Viewpoint on overcoming the pricing power of hospitals.  A substantial body of research over the last few years suggests that hospitals’ unit price increases are largely responsible for excess health spending growth.  Hospitals are usually able to command these price increases because they have significant market power.  Health plans have learned to just pass on the increases in premiums.  The authors suggest several steps, including incentivizing physicians to use lower-priced hospitals (which will be hard to do when physicians increasingly are employed by hospitals) and increasing pricing transparency.  Those won’t help much, but breaking up hospital systems and forcing them to divest non-inpatient assets would.  (JAMA Viewpoint)

Towers Watson released its survey of 440 employers,finding that most employers (88%) say they will continue to offer health benefits, notwithstanding continued rapid increases in health care coverage costs.  Many employers are concerned about avoiding the excise tax for high cost health plans and are examining changing benefit designs, reducing dependent subsidies and other strategies.  Over half of employers plan to raise employee cost sharing for 2013.  Employers continue to increase their offerings of HSAs and many are exploring defined contribution alternatives as well.  Telemedicine is an area that many employers singled out as having potential to offer better and less expensive health care delivery.  (TW Release)

The American Journal of Managed Care carries an article which used an expert panel to identify components of electronic health records and health information exchanges that will most likely create savings, a dubious proposition given the research to date.  The authors looked at use of HIT in three settings; inpatient, ambulatory and ERs.  They identified a number of functionality components and had 28 experts review proposed rankings of those components.  They found 54 high-scoring components, such as alerts for expensive drugs, alerts for duplicate lab orders and sending and receiving imaging reports.  They suggested that these components should be the targets for future stages of meaningful use.  (AJMC Article)

Another Journal of the American Medical Association Viewpoint examines the latest attempt to control health costs in Massachusetts, the supposed poster child for health care reform, which has seen its spending problems exacerbated since adoption of its reform law.  Massachusetts has the highest per capita spending of any state, at $9278 versus the national average of $6815.  And of course because the solution to problems largely caused by regulation is even more regulation, now the state has passed a law that sets a target for spending growth or no more than the state economy’s growth rate.  There are only limited enforcement mechanisms, however, but there is a new commission, because we can always use more bureaucracies.  (JAMA Viewpoint)

A Commonwealth Fund Brief looks at experience with the ACA’s high-risk pool plan and what lessons it might hold for the parts of the ACA which are yet to be implemented or for future reforms.  The high-risk pool has been a complete failure, enrolling only 78,000 people to date, largely because per person costs are far higher than projected.  The coverage is not affordable for many high-risk patients, even though its cost is heavily subsidized.  The administrative and operational expenses of the plan are also very high, what a shock for a government-run program.  One of the biggest shortfalls of these kinds of plans, which the ACA did not address, is that they do nothing to require covered persons to improve their health behaviors.  Doing that might help lower the costs.  (Commonwealth Brief)

 

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