Healthcare Insurance: Reform Begins to Hold Insurers Accountable

First it was Aetna. Now Blue Shield of California is doing the right thing. Who will be next? Health Insurers are beginning to slice premiums and rebate money to customers.

Last year, many of health care reform’s critics (on the left as well as on the right), argued that the Obama administration had made a “deal” with the private insurance industry, giving it carte blanche to continue driving health care costs skyward.

I disagreed. Certain tough provisions in the Affordable Care Act (ACA) suggested that the insurance industry was not dictating the terms. In particular, the requirement stipulating that insurers pay out 85 percent of the premiums they receive in reimbursements to doctors, hospitals and customers signaled that insurers were not holding the pen while legislators pretended to write the bill. Under the ACA, if insurers do not meet this standard, they will have to rebate hundreds of millions to their customers. Now, this is beginning to happen.

(Insurers must pay out only 80 percent of premiums when offering insurance to small groups because in these cases, insurers' administrative costs, as a percentage of revenues, are so much higher. But this, too, will crimp net income.)

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Health Care Bloggers Raise Some Provocative Questions:

  Alzheimers – Could it be Over – diagnosed?

 Are Docs in Danger of Becoming “Slaves”

 Maybe Insurers' Profits Are Not So Big After All?

 Is the Affordable Care Act Part of the Answer to the Medicare ‘Crisis’?

 Despite Chaos in Washington, is Reform Moving Ahead According to  Plan?

 Should We Eliminate Co-Pays for Cancer Drugs?

 Are Hospitals Hyping Robotic Surgery for Prostate Cancer?

  IT Vendors and eRX – -Is the Juice Worth the Squeeze?

  Racial Disparities: When African-Americans Have a Stroke Why Do Many Call A Friend First?

  When Patients with Health Savings Accounts Spend Less, & Skip  Immunizations for Kids, Is This A Virtue or a Vice of HSAs?

Should the Private Sector Sink $$$ into a War on Poverty?

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On the Heath Affairs’ blog, Chris Fleming hosts the most recent edition of Health Wonk Reviewa rich round-up of some of the best health care posts of the past two weeks.  Below, I’ve tried to highlight provocative work by bloggers who may not be well-known to HealthBeat readers, as well as posts about topics that we have been discussing here. Inevitably, I have left out some excellent entries. You’ll find Fleming’s full report here http://healthaffairs.org/blog/2011/05/26/health-wonk-review-memorial-day-edition/

Alzheimer’s: Laura Newman recently spent three days “listening to expert neurologists, demographers, caregivers, and policy people talk about Alzheimer’s,” Flelming reports,  and she has a host of interesting and informed questions about all aspects of the disease and how reporters and bloggers can most usefully write about it. She details her thoughts in a post on her blog, Patient POV

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Cancer Care: Give Patients the Information They Need to Make Informed Decisions

Yesterday the New York Times asked me to participate in a "Room for Debate" forum on Medicare reform. Here’s the topic: "The Obama administration will soon track spending on millions of individual beneficiaries, reward hospitals that hold down costs and penalize those whose patients prove most expensive. What’s the one thing Medicare should stop paying for? Please be specific."

See the full Forum, and reader’s comments here. The New York Times also ran a news story that questioned Medicare’s plans that you can access here.

Below, my contribution to “Room for Debate.”

Note: The Times headlined my piece “Don’t Let Oncologists Make All of the Decisions” which might suggest that I’m “blaming oncologists.” My original headline was the one I use below. My argument is that the burden is on the hospital: it’s up to the hospital to ensure that patients know that palliative care exists, and that a palliative care consult doesn’t mean that they are dying or that they should give up treatment. Palliative care consults are appropriate for any seriously ill patient who wants to know more about his odds and the risks and benefits of various procedures.

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Arizona’s “Fat Tax” Punishes the Poor

The Wall Street Journal calls it the “Medicaid Fat Fee,” Time magazine refers to “Arizona’s Flab Tax”  while Arizona’s top health officials say a proposed penalty that would be levied on certain Medicaid recipients “is a way to reward good behavior”—a stick without the carrot approach.

At issue is the latest plan to help Arizona make up for its $1.15 billion budget shortfall and planned 28% cut to the state’s Medicaid program. The idea is to require certain childless adults—those who are obese and fail to follow a doctor-ordered weight-loss plan; those who are chronically ill with a condition like diabetes and don’t adhere to recommended treatment; and smokers—to pay a $50 surcharge.

If instituted, the plan is projected to add about $500 million to fill the budget deficit. It would also signal the first attempt ever to penalize Medicaid recipients for what the state deems “unhealthy behaviors” that drive up health care costs. “If you want to smoke, go for it,” said Monica Coury, spokeswoman for Arizona's Medicaid program. “But understand you're going to have to contribute something for the cost of the care of your smoking.”

Despite support from Gov. Jan Brewer and the GOP-heavy Arizona state legislature, the proposed “fat tax” has its detractors, especially among advocates for the poor. In an interview on Southern California Public Radio (SCPR), Arthur Caplan, Director of the Center for Bioethics at the University of Pennsylvania said of the plan “I don’t think it’s fair, I think it’s a bad idea.” Caplan says singling out the “poorest of the poor,” (in Arizona we’re talking about a family of two earning under $15,000/yr) is “regressive, short-sighted and cruel… It’s just easy to pick on the poor who do stigmatized things.”

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