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What If All Your Reimbursement Was Medicare?
I was talking to a health system CEO the other day, who was angry at the deals being struck between leaders of industry lobbying groups and government leaders. Never mind that these "deals" are just handshake agreements not to oppose the president or Congress' idea of healthcare reform—whatever shape it eventually takes.
Angry may be a strong word. Let's just say he was dissatisfied. We talked about the $80 billion in dubious cost cuts over the next 10 years that drugmakers agreed to with President Obama earlier this year in order to buy not only their silence, but their support, in the face of healthcare reform. It's hard to argue that that deal hasn't since been exposed as a not-so-well-hidden gift to drugmakers.
We then talked about the $155 billion in cuts the main hospital lobby, the American Hospital Association, agreed to in principle in July, which doesn't seem nearly as lucrative, as I'll get to in a minute. In short, it doesn't look like hospital negotiators did quite as well.
Finally, we talked about the one big lobbying group that hasn't made a deal on healthcare reform: insurers. Predictably, that industry has become the villain du jour in the raucous healthcare reform debate we've been following all year. Hospitals have avoided that fate, but at what cost? My purpose is not to defend health insurers, but to ask whether any "deal" agreed to under pressure is really a good deal.
Take the hospitals. In return for agreeing not to oppose healthcare reform, the AHA, representative of the nation's more than 5,000 hospitals, said its members would collectively accept $155 billion in reimbursement cuts over 10 years in return for a reform plan that would insure effectively all of the currently uninsured—presumably through a combination of a mandate requiring all citizens to carry health insurance and a public option health plan that would facilitate that coverage.
The announcement of the deal came after administration heavies not-so-quietly suggested that $200 billion in cuts would be about right, causing hospital representatives to gulp—hard.
The health system CEO I was talking to was angry that there was no provision to keep such a public option from ratcheting back reimbursement further once it's in place. He was off about that. In fact, the deal contains a promise that "public option" reimbursement rates would not reach the low level of Medicare and Medicaid reimbursement rates, which, depending on whom you believe, come in at somewhere near 90% and 60%, respectively, of the cost of providing that care.
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Bob Coli, MD (11/11/2009 at 11:49 AM)
The major suppliers of healthcare services and products seem to be ignoring the question posed by Mr. Betbeze.
The commercial health insurance monopolies (and oligopolies) already cover 177 million employed Americans and their dependents. The Medicare and Medicaid monopsonies (?buyer monopolies?) already cover 96 million elderly and poor Americans. Its supporters clearly intend the third, government-run ?public option? monopsony to ultimately cover the rest of the U.S. population of 305 million.
Yet, with an irony beyond the capacity of a skilled writer to invent, the AHA, the AMA, eleven national physician specialty organizations, the MGMA and drugmakers are publicly supporting passage of the public option, while the AHIP is lobbying to block its passage.
Since the sellers of healthcare services and products are already familiar with the adverse pricing and regulatory effects of such massive market concentration, how can they believe that public option reimbursement rates will not mirror the historically low levels of Medicare and Medicaid reimbursement rates?
One thing is certain. By further expanding and consolidating government-run monopsony power to the entire population, a successful public option will ensure that the purchasers of healthcare services and products will never enjoy the price, quality and access benefits of a consumer-centered, value-driven competitive market.
It would be interesting to know if the sellers of healthcare services and products believe that continuing to negotiate reimbursement deals with the powerful federal government and commercial insurers is really a better way to protect their interests than operating in the alternative pro-consumer, competitive marketplace.
Gary (11/9/2009 at 1:26 PM)
First of all, to this point the majority of the discussion (and rhetoric) has not been about 'healthCARE reform', its been about health 'insurance' reform - which is what this bill this bill is primarily about - and if this bill passes, the net result will be very good for insurance companies and the pharmaceutical industries - and most hospitals will also have some gains (increased volume) as all of these entities will generate revenue from the previously uninsured (thanks again US taxpayer).
For the record there are a number of hospitals who are happy with Medicare (compared with Medicare replacement HMOs) and whose existence depends on Medicare... as for the perpetual lobbying and horse-trading for Medicare reimbursements, its is as old as the program itself.
Is this bill better than nothing? quite possibly, but until we COLLECTIVELY take dramatic steps to REALLY reform healthCARE in this country, we're simply nibbling at the edges of a failing and grossly over-expensive system.
Ken (11/9/2009 at 10:05 AM)
All providers negotiate with Medicare now. Take it or leave it. Any indication the new plan will be any different?
The public option will be a boon to politicians, just like the sustained growth rate has been. Every two years , when it is election time, there will be money poured into lobbying firms and politicians to change or improve the payment system in some fashion. This enables them to get reelected because they can usually get a lot more money than the challenger to ?get their message out? like ?I saved the public option, again, for all my constituents?.
If doctors and hospitals and others in healthcare want to regain their autonomy they need to get out of the game. Just do not play it to the point politicians come begging to them for help rather the other way around. It will be painful initially. It could be dangerous because politicians are law writers and might retaliate at their loss of power by making the delivery of healthcare, out of the government option, illegal. There is a real game of chicken for you!
I keep wondering where is the lobby for the government to do less, take less, and leave us to our personal business?? But then that would be playing the game, not being outside it.