May 27, 2011, 6:00 am
By UWE E. REINHARDT
Uwe E. Reinhardt is an economics professor at Princeton.
Alan Greenspan, the former chairman of the Federal Reserve, opined on “Meet the Press” last month that to cope with the growing federal deficit the United States should go back to the federal income tax rates of the Clinton years. Such a step would raise tax rates for all American taxpayers.
I was reminded of that remark earlier this week at this year’s Princeton Conference on Health Policy, organized by the Council on Health Care Economics and Policy, housed at Brandeis University’s Heller School for Social Policy and Management.
In a session on “Future Health Care Spending: Political Preferences and Fiscal Realities,” Henry J. Aaron of the Brookings Institution presented this fascinating chart:
Center on Budget and Policy Priorities, based on estimates from Congressional Budget Office Read more…
May 13, 2011, 6:00 am
By UWE E. REINHARDT
Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.
The annual Milliman Medical Index, released earlier this week by Milliman Inc., the Seattle-based employee-benefit consulting and actuarial company, is illuminating, and I highly recommend it. The index is particularly timely as the nation considers proposals to reduce sharply the role of the federal government in financing health care, along the lines proposed by Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee.
The index measures the total cost of health care for a typical American family of four covered by a preferred provider plan, widely known as a P.P.O. The index’s great virtue is that it includes not only the employer’s and employee’s contributions to the premium for P.P.O. coverage but also the out-of-pocket expenses the family has under the plan.
Employers can control the growth of health insurance premiums by shifting more and more of the cost from the insurance policy to the family’s budget, through higher deductibles and coinsurance or by excluding benefits from coverage that had previously been covered.
Thus, the index provides a more accurate picture of the actual burden of health spending for a typical American family than does just the premium for P.P.O. coverage.
Read more…
April 29, 2011, 6:00 am
By UWE E. REINHARDT
Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.
My post last week, on the budget plan offered by Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee, ended with the observation that the plan did not propose measures to control overall health spending in the United States, “nor does that appear to have been Mr. Ryan’s objective.”
To which one reader responded:
I do completely reject that there are no cost controls in the Ryan budget. If there is no federal, state, insurance or private money to pay for extremely expensive care such as in Post No. 7 above, such care will simply not be delivered or paid for.
Let me, for all to see, acknowledge this well-taken point. If less money were available to be spent on health care, then overall health spending would be lower.
But let me also reproduce a comment from that Post No. 7:
If cutting Medicare is so important, why not start now, rather than with today’s 55-year-olds? Start by not paying for life-support treatments for critically ill very old people, as Medicare did for my 92-year-old father’s PEG feeding tube three years ago. He got one, recovered enough to spend three more years in nursing homes and died last month after running up another $300K or so in medical bills paid by Medicare and his health insurance as a retired teacher.
Read more…
April 20, 2011, 10:00 am
By CATHERINE RAMPELL
As required by last year’s health reform legislation, the Labor Department has put together a report on employer-sponsored health insurance coverage that shows what benefits are typically covered by these plans. The results, in one chart:
Source: Labor Department, “Selected Medical Benefits: A Report from the Department of Labor to the Department of Health and Human Services” A service is counted as “covered” whether or not 100 percent of the service is paid for by the insurance plan. The report listed a service as “covered” if the health plan documents specifically mentioned coverage of it (as opposed to not mentioning it, or specifically saying that the service was excluded).
As you can see, having private insurance doesn’t guarantee that the life-saving service you need — like kidney dialysis, or an organ transplant — will be covered at all by your plan. And even some services that would be considered relatively basic by many patients, like regular gynecological exams, are excluded.
It’s important to keep this in mind in discussions about giving more Americans access to “health insurance.”
April 1, 2011, 6:00 am
By UWE E. REINHARDT
Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.
On March 23, Senator Ron Johnson, Republican of Wisconsin, marked the first anniversary of President Obama’s signing into law of the Affordable Care Act of 2010 by publishing a commentary in The Wall Street Journal, “ObamaCare and Carey’s Heart.”
He began with a touching celebration of the life-saving operation that had been performed some 27 years ago by highly skilled surgeons on the senator’s young daughter, who was born with a serious heart defect. He noted that this undoubtedly expensive operation had been financed by a “run-of-the-mill plan available to every employee of an Oshkosh, Wis., plastics plant.”
His commentary suggests that he views this “free market” approach to financing health care as the foundation of our health system’s remarkable innovations and achievements.
Senator Johnson’s commentary then veered into a sharp broadside aimed at the Affordable Care Act of 2010:
I don’t even want to think what might have happened if she had been born at a time and place where government defined the limits for most insurance policies and set precedents on what would be covered. Would the life-saving procedures that saved her have been deemed cost-effective by policy makers deciding where to spend increasingly scarce tax dollars?
Not surprisingly, this comment elicited much critical commentary, some of it needlessly vehement.
Read more…
January 25, 2011, 11:00 am
By DAVID LEONHARDT
The National Academy of Sciences has just released a fascinating report on life expectancy in rich countries around the world. The researchers who wrote the report — public-health experts, demographers, economists and others, from around the world — have tried to figure out why Americans don’t live as long as people in many other countries.
From a summary of the report:
Over the last 25 years, life expectancy at age 50 in the U.S. has been rising, but at a slower pace than in many other high-income countries, such as Japan and Australia. This difference is particularly notable given that the U.S. spends more on health care than any other nation….
Three to five decades ago, smoking was much more widespread in the U.S. than in Europe or Japan, and the health consequences are still playing out in today’s mortality rates, the report says. Smoking appears to be responsible for a good deal of the differences in life expectancy, especially for women….
Obesity’s contribution to lagging life expectancies in the U.S. also appears to be significant, the report says. While there is still uncertainty in the literature about the magnitude of the relationship between obesity and mortality, it may account for a fifth to a third of the shortfall in longevity in the U.S. compared to other nations, the report says….
Lack of universal access to health care in the U.S. also has increased mortality and reduced life expectancy, the report says, though this is a less significant factor for those over age 65 because of Medicare access….
And from the report itself:
With respect to income inequality, it is widely believed that such inequalities are higher in the United States than in other high-income countries, in part because the United States does less to redistribute wealth among its citizens…. Poverty rates also appear to be higher in the United States than in most of the other countries…. Read more…
December 24, 2010, 6:00 am
By UWE E. REINHARDT
Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.
My post last week on Medicare’s payment of physicians ended with the observation that from 2000 to 2009, Medicare raised physician fees only 7 percent (an average of 0.75 percent a year), while the Medicare Economic Index (or M.E.I.), which tracks costs incurred by medical practices, rose 34 percent (an average of 3.3 percent annually).
Even so, Medicare’s spending on physician services per beneficiary rose 61 percent, an average annual compound rate of 5.4 percent a year.
The difference between the tiny increases in physician fees and the large increase in spending on physician services reflected, of course, a sizable increase in the volume of physician services per Medicare beneficiary. It grew by 46 percent over the period, at an average annual compound rate of 4.3 percent a year.
Read more…
December 17, 2010, 6:00 am
By UWE E. REINHARDT
Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.
“Medicare fees to be cut by 25% in 2011,” was the alarming headline in Internal Medicine News on Nov. 3. “Unless Congress acts,” the story continued.
After much suspense and breathless media reports, Congress did act.
So on Wednesday, just in the nick of time, President Obama signed into law a delay of one year for such a disastrous cut. Once again, near disaster had been averted in a recurring drama that reminds one of nothing so much as Kabuki theater.
After all, we had been near the brink many times before, several times in 2010 alone, and each time Congress shrank back from the abyss. By now, the movement is predictable.
But who, then, are the misanthropes who so frighten the daylights out of our senior citizens and the physicians who treat them — or may not?
It turns out not to be a human being at all!
Instead, it is just an innocent formula that Congress imposed on itself as part of the Balanced Budget Act of 1997. Read more…
December 10, 2010, 6:00 am
By UWE E. REINHARDT
Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.
Have you ever heard of the RUC?
If not, you are not part of the small circle of cognoscenti who know what makes the world go ’round – at least in Medicare. To enter the circle, read on.
In my post last week, I described how Medicare pays physicians for the services they render Medicare beneficiaries. In a nutshell, for a particular service (e.g., a routine office revisit or an appendectomy or a heart transplant) that we shall call Z, Medicare pays a fee calculated with this formula: Read more…
December 3, 2010, 6:00 am
By UWE E. REINHARDT
Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.
Medicare pays physicians for services rendered to Medicare beneficiaries according to a fee schedule that was enacted when President George H.W. Bush signed the Omnibus Budget Reconciliation Act of 1989. The schedule took effect on Jan. 1, 1992, and is in force today, after a series of modifications over time.
This fee schedule contains about 7,000 distinct nonsurgical and physician services, classified under a nomenclature based on the Current Procedural Terminology to which the American Medical Association holds jealously guarded intellectual property rights.
Readers may find it a bit odd, as do I, that the nomenclature of a government fee schedule for physicians is privately owned, which may restrict its use for research outside government and definitely does so for commercial purposes.
One would have thought that the nomenclature of the government’s fee schedule would be a pure public good, freely available to all potential users.
Read more…
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