health care reform

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We’re No. 1, Not In A Good Way: Highest Hospital Administrative Costs

(Connor Tarter/Flickr via Compfight)

(Connor Tarter/Flickr via Compfight)

By Alvin Tran
Guest Contributor

When it comes to hospital administrative costs, a new Health Affairs study finds, our country is No. 1 and we’re way ahead of the curve — unfortunately.

In the study, researchers analyzed hospital accounting data to compare administrative costs across eight countries: Canada, England, France, Germany, the Netherlands, Scotland, the United States and Wales. They found that administrative costs accounted for more than 25 percent of total U.S. hospital expenditures — far ahead of the pack.

“We were surprised by just how big the differences have grown. The U.S. is in another league than every other country,” said Dr. David Himmelstein, the study’s lead author and a professor at the City University of New York’s School of Public Health.

Himmelstein and his colleagues also found that countries operating under a single-payer health system, such as Canada and Scotland, had the lowest administrative spending, and calculated that the U.S. could save $150 billion a year if it had a system like theirs.

“You’re pulverizing all this money on something that does not make people better.”
– Economist Uwe Reinhardt

Based on Medicare Costs Report data from 2011, hospital administrative spending in the U.S. amounted to $667 per capita — more than double what the Netherlands and England spend.

In the Netherlands, administrative costs consumed just 19.8 percent of hospital budgets — compared to 25.3 percent in the U.S. —  and in England, just 15.5 percent.

In a phone interview, Himmelstein said American hospital administrative costs have doubled over the last decade. “We anticipate that they’ll continue to go up because we’re continuing to pursue health policies that stimulate administration,” he added.

Uwe Reinhardt, a health economist and professor at Princeton University, sees high hospital administrative costs as a moral question. “You’re pulverizing all this money on something that does not make people better — doesn’t improve their health,” he said.

Reinhardt, who said he had once believed the new federal health law would lower administrative costs, now thinks Obamacare has become too challenging and complex, especially with the addition of navigators and health exchange administrators.

“I think the administration of the American health system has outpaced our ability to cope with it. Even the best IT people cannot cope with it anymore,” he said, adding that “Obamacare, if anything, adds to the administrative overhead.” Continue reading

A Sneak Peek At ‘Health Reform: The Comic Book’

MIT economist Jonathan Gruber calls health care reform the “biggest social policy legislation since Medicare.” So what better way to explain such a serious, complex and far-reaching topic than through comics?

Gruber, an advisor to President Obama on national reform and a key architect of Massachusetts reform, says he was hesitant to distill such a weighty subject into comic book form but in fact, by explaining the problem graphically, through characters like Betty on Medicare or unlucky Carlos who has to buy his own health insurance, Gruber covers a lot of ground, and is able to lay out the various issues and make his case for the national health law on both a macro level and through gritty details. (“There are no death panels,” the comic-book Gruber, black-and-white and bespectacled, tells a ranting grandmother-type shaking her cane.)

One measure of the book’s clarity and accessibility is that my 8-year-old daughter picked up my review copy and started reading. Health Care Reform: What It Is, Why It’s Necessary, How It Works, will be published by Hill and Wang in January. I spoke briefly with Gruber this week and agreed to post only one image, for now. There’s more to come, though, so stay tuned.

Mitt Romney is the single person most responsible for health care reform in this country.

What’s the appeal of a comic book on health reform?

I think what really convinced me, when you want to educate people, the comic is a great way to do it. When an airline wants you to know what to do in case of an accident, they give you a comic.

Here we have perhaps one of the most complicated topics that people deal with in society, so the idea of explaining it in a comic form is appealing. Really, it’s not a comic book, it’s a graphic novel, it’s trying to use pictures to make compelling what is essentially dry — let’s face it, this is not exciting, it’s not funny, it’s fundamentally a policy argument. Using pictures allows you to use fewer words. Continue reading

Since Recession, Nearly All Mass. Insurance Newcomers On Medicaid

Don’t miss today’s important story by WBUR’s Martha Bebinger about the recession’s effect on health insurance in post-reform Massachusetts. It’s here, and here’s the gist: “The latest numbers show that virtually all Massachusetts residents who have gained coverage since the landmark 2006 law passed are now in a government health care program.”

This wasn’t supposed to happen, Martha recalls. The early mantra of the state’s health reform was “shared responsibility,” meaning that individuals, employers and state government would all share the burden of getting more people insured.

But here’s my analogy: If Massachusetts is the country’s laboratory for health care reform, the recession has contaminated our test tubes, and skewed our results. Martha reports:

WBUR's Martha Bebinger

Many experts agree the recession has played an enormous role in this shift from private to public coverage. Since the coverage law passed in 2006, 411,000 more residents of Massachusetts have health insurance; it’s the largest insurance expansion in the country. In the first few years, the expansion was fairly evenly divided between private and public insurance. That’s no longer the case.According to Nancy Turnbull, an Associate Dean at the Harvard School of Public Health, “virtually everyone” of the Massachusetts residents who have received health care coverage with the implementation of the new law are enrolled in a public plan.

“It’s virtually everyone because the number of people who have employer coverage has gone down,” Turnbull said. “That’s not at all surprising, that’s happening all over the country.”

All this is very politically sensitive, Martha notes: “There’s concern these numbers will reinforce the view that Massachusetts, and by association, the national health reform law, is launching a government health care takeover.”

But it ain’t over till it’s over — that is, the recession is over. The Patrick administration tells Martha the very latest state numbers, still unpublished, will look better. And one more important point, from Harvard’s Nancy Turnbull: “The good effect of our law is that we have not had the large increases in the number of people without health coverage.”

Is Massachusetts Reform Making Residents Healthier?

WBUR's Martha Bebinger

WBUR’s Martha Bebinger has covered health care reform in Massachusetts longer and deeper than any other journalist on the beat. Here, she reports on attempts to answer a key question about reform in Massachusetts and around the nation: Does it make people healthier?

For a week in the summer of 2009, Dennis Foley watched his right foot swell and turn red, then purple with a tinge of blue. Finally, when he could barely walk, Dennis hobbled into the Brockton Hospital emergency room. He had not seen a doctor for 10 years and never had a regular physician.

“I couldn’t afford health care,” says Foley, “so I tried not to worry about my problems.”

Foley was in Brockton Hospital for 18 days while doctors worked to avoid amputating his right leg and control the infection. Along the way, they diagnosed high blood pressure, diabetes and an irregular heart beat, and enrolled Foley in the state’s subsidized health plan, Commonwealth Care. Today, Foley, who is a part-time custodian, has his blood pressure and diabetes in control, rarely feels chest pain and sees his primary care doctor on a regular basis.

We’ve heard many such stories since the state passed its landmark health coverage law five years ago. There are newly insured women who had their first mammogram, found a lump and were treated for breast cancer; men who had their first stress test and received stents to open dangerously clogged arteries; and my ceramics teacher whose cataracts had grown so cloudy he could no longer paint pots or drive.

But beyond these individual stories, there is no proof that Massachusetts residents are healthier; no studies that show lower rates of diabetes or heart disease and no evidence that we are living longer. This is an important issue for states around the country where lawmakers wonder if national health reform is worth the money and effort.

Supporters of the Massachusetts law say it is just too early to assess the effects of expanding health coverage, but they have no doubt there is a link between coverage and better health. Dennis Foley’s doctor at Brockton Neighborhood Health Center, Joe Panerio-Langer, says Foley is healthier because he’s receiving regular care. And Panerio-Langer believes that with more residents covered by health insurance, he and other doctors are addressing more patient problems before they develop into a serious illness.

There was a 2.7% decrease in the number of patients treated for preventable conditions such as a ruptured appendix, asthma and foot or leg amputations.

Amanda Kowalski, an economist at Yale University, supports the claim that increased coverage is contributing to a decrease in serious illness, but she doesn’t have firm evidence. Kowalski analyzed information about patients as they left the hospital in Massachusetts before and after the law passed. She and a colleague compared the difference to data from other states in a working paper published by the National Bureau of Economic Research last year. Kowalski says there was a 2.7% decrease in the number of patients treated for preventable conditions such as a ruptured appendix, asthma and foot or leg amputations. It’s a small number, but Kowalski says it is statistically significant.

Continue reading

Q&A: When A Health Wonk Runs For Office

Christine Barber

The little news item caught my eye: A health policy analyst was running for alderman in Somerville.

A member of Health Wonk Nation seeking public office! That’s unusual, isn’t it? (Though you’d think so many of them would be driven crazy by the irrational aspects of our health care system that they’d get into politics out of desperation.)

I wondered how an analyst’s deep knowledge of the Byzantine ins and outs of the system might play out at political-platform time. So today I asked the candidate, Christine Barber. She’s a senior policy analyst at the nonprofit Community Catalyst, and used to be a research analyst on the legislature’s Committee on Health Care Financing.

Q: Does your platform in your run for office include any planks on health care?

Yes and no. I’m running for ward alderman to represent my neighborhood, which is Winter Hill and Ten Hills in Somerville. I’ve spent my career working on health care coverage, typically at the state and national levels because that’s where it’s typically regulated. A lot of the improvements to cutting costs, improving quality, improving access — a lot of those really need to happen at least at the state level and in some cases the national level.

That said, I think there’s some work we do at the municipal level that is as critically important, but more in the public-health realm than the health coverage realm.

A few things that are important to me that I think can be improved in my neighborhood are:
– Food access and nutrition: Access to vegetables and fresh foods, preferably local foods
– Public transportation: We’re slated for the green line extension but while we wait, we need to rethink our bus service.
– Rethinking bicycle access: We don’t have good bike lanes. Overall, we need to be thinking of other ways to get where we’re going because air quality in Somerville is consistently poor.
–Encouraging the overall health of our residents.
–Keeping our streets safe: Children walk to school every day; making sure they’re safe on their travels, and making sure crime is down and that people feel safe. Obviously that affects their health and wellbeing.

Q: Are there any ways your deep understanding of health care issues affects what you want to do in office? Continue reading

Major Milestone: CommonHealth Monthly Traffic Soars Well Over 100K

Eric F Savage/Flickr CC

Please indulge us in a moment of self-congratulation: As of this morning, CommonHealth’s monthly pageviews have soared to nearly 112,000. Not bad for a blog that was at about 8,000 a month last year. A note on our history:

CommonHealth began as a unique forum to discuss the landmark Massachusetts health care reform of 2006. (You can find archives of those earliest posts in our “Greatest Hits” column below.) In fall of 2010, NPR and The Knight Foundation funded a major expansion that transformed CommonHealth into a full-blown health news Website, covering the next phase of reform but also personal health, medical research, the cost of care and more.

We denizens of the Web live and die by our traffic, that all-too-easily measured metric of whether the public likes what we do. But one of the most heartening revelations of the last few months is that (with a few exceptions like yesterday’s zombie post), our most popular posts are those that are most original, the deepest and even the longest. See our “Greatest Hits” column at the right for a few examples.

We plan to keep doing more of the same. But this high-traffic, big-exhalation morning also seems like a good moment to ask: Readers, what else do you wish we did more of?

Committee Seeks ‘Reason To Believe’ From Gov. Patrick


I’d describe Gov. Deval Patrick’s reception by the legislature’s joint committee on health care financing today as extremely warm. I mean, really, both chairmen — Sen. Dick Moore and Rep. Steven Walsh — brandished copies of the governor’s new memoir, “A Reason To Believe.” What could be more supportive than that? Of course, Dick Moore did take to brandishing the title with a bit of his own edge: at one point, he averred that he’s seeking “a reason to believe” that the governor’s proposed health care bill will accomplish his goals. But still, there was no grilling; they saved that for other Cabinet members.

Here are a few of today’s points from the governor:

“If the first phase of reform was about reaching the 400,000 or more uninsured, this phase is about relief for all 6-1/2 million Massachusetts residents.”

The challenge before us is big but we cannot be defeated by its complexity. The good news is that there’s an emerging consensus about solutions.

Some in the industry say the state needs only to lay out a framework for reforming the way we deliver care and the market will take care of the rest. It is true many good things happening in the market…but we need to scale these up, we need to set up common expectations and standards, and we need to make sure that the savings are passed on to consumers and patients in the form of lower premiums. The goal is not to punish any part of the industry or to return to the days of price regulation….The goal of this proposal is to keep the pressure on all of us.

Every day, he said, he appreciates more the 2006 reform extending near-universal access to health insurance
I also understand more clearly every day why cost control was put off to another day. Because if you think access was hard, wait until you take on cost control.

Some very powerful interests “have deep stakes in maintaining the status quo. Our job is to balance all the interests but always to strike the balance in favor of the public good.”

‘A Thousand Brilliant Minds’ Unleashed On Health Reform

“We have the ability to unleash a thousand brilliant minds, to innovate and create and find better ways to provide care and pay for care.”

That lovely phrase came today from the Massachusetts Health and Human Services Secretary, Dr. JudyAnn Bigby. It may come back to haunt her, if people start comparing those thousand brilliant minds to a thousand cooks, spoiling the broth. But it seemed to sum up nicely today’s premiere in the series of legislative hearings to be held on Gov. Patrick’s proposals for the next phase of health reform.

I can’t stomach the word “stakeholder.” It always makes me think of someone clasping a filet mignon. So let’s just say that all the state’s major players in health care began to weigh in today on the governor’s plan, along with anyone else who wanted to testify. The hearing was the first of five planned; the next is Monday in Worcester. With about 50 people signed up today, it was looking like a long, long day at the State House for the legislature’s joint committee on health care financing.

The hearing began with Gov. Deval Patrick’s testimony, but let’s jump first to Attorney General Martha Coakley, in the video below. Her main point: The proposed shift toward paying doctors for a patient’s overall care rather than for each service won’t fix one of the key drivers of health care costs in the state: the fact that some providers are so big and powerful that they can charge more. Some call this the “market share” problem; it helps me to think of it as the “800-pound gorilla” problem.

Note: She said her office’s next report on the state’s health care market would come out in June.
More on today’s hearing: A sampling of key points from Gov. Deval Patrick and others.

The Ultimate Primer On Health Care Costs And Massachusetts Reform — In 17 Minutes

http://www.youtube.com/watch?v=oJI0Hk9zdz4

I get it all now! Because I’ve just watched this fantastic slide presentation by Sarah Iselin, president of the Blue Cross Blue Shield of Massachusetts Foundation, explaining the spiral in health care costs and Massachusetts reform, past and present.

Seventeen minutes is a small investment for such sweeping and rare clarity on these insanely complex issues. Deepest thanks to Sarah, to Martha Bebinger for sound work and to Jesse Costa for the multimedia meshing. If I were teaching a course on health care policy, this would be the first thing on my syllabus. Actually, if I were running the House of Representatives, I’d make all the freshmen reps watch it, too…

Ask Deval Patrick Your Health Reform Question


The Harvard School of Public Health is making an offer we cannot refuse: Send in your health care reform question for Gov. Deval Patrick and he could answer it during a Webcast tomorrow afternoon. You can also send a question for any of these local luminaries on the discussion panel:

John Auerbach, Commissioner, Massachusetts Department of Public Health
Hurmon Hamilton, President, Greater Boston Interfaith Organization
Nancy Kane, Professor of Management, Harvard School of Public Health
John McDonough, Director, Center for Public Health Leadership, Harvard School of Public Health; former Executive Director of Health Care for All

They’re all slated to speak on the next phase of health care reform — costs and quality — at a forum at the school of public health’s aptly named “Forum,” which aims to bring scientific experts and political decision makers together on urgent health topics. It is scheduled to be Webcast tomorrow at 4 p.m. here. I just asked WBUR’s Martha Bebinger, my revered health care policy sage, what our question should be, and we came up with this:

What is your best indication that a shift to global payments will actually save money, and how soon do you think those savings can actually be realized?

Okay, just sent it in to theforum@hsph.harvard.edu. Readers, if you send in a question, feel free to cut and paste it as a comment here as well. Just wondering what you’re most wondering!