October 2009

You are currently browsing the monthly archive for October 2009.

Will Obama’s Healthcare Reform Produce a Religous Revival?

October 13, 2009 in Current Events | 1 comment

Many of the healthcare reform bills  under consideration include an individual mandate.  If you don’t purchase health insurance you pay a fee.  For the Senate Finance Committee and Senate Health Committee, this penalty would be up to $750.  The House Version would assess the fee as 2.5 percent of adjusted gross income over a certain level ($18,700 for a couple).  However, in all cases, individuals with religious objections would be exempt from these penalties from not purchasing insurance.

Will Obama’s healthcare reform efforts produce a religious revival?  It’s doubtful, but the number of people who claim to have religious objections to avoid compliance with the individual mandate will rise.

Tags: ,

Delivering Vaccines: A Case Study of the Distribution System of Vaccines for Children

October 13, 2009 in My Papers, Vaccinations | No comments

A paper written by John Fontanesi and myself was recently published in the October 2009 edition of the American Journal of Managed Care. The paper is titled “Delivering Vaccines: A Case Study of the Distribution System of Vaccines for Children.” The abstract of the paper is below:

Objective: To evaluate the efficacy of the central- 
ization by the Centers for Disease Control and 
Prevention of their pediatric vaccine distribution 
system. 
Study Design: In March 2007, the Centers for 
Disease Control and Prevention began a pilot 
program to reform the Vaccines for Children  
(VFC) program. All California VFC providers  
were required to place vaccine orders under  
the centralized logistic system of the Vaccine  
Management Business Improvement Project 
(VMBIP). For this study, VFC ordering, use, 
and delivery data were collected from 2 large 
southern California healthcare providers that 
collectively served more than 200,000 children. 
Data collection occurred between January 2005 
and June 2008. 
Methods: This case study measures the change 
in the mean VFC delivery times before and after 
the VMBIP.  The data underwent simulation to 
estimate the number of days per year a provider 
would have zero VFC inventory before and after 
the VMBIP. 
Results: After the VMBIP was implemented, 
delivery times increased from 1.6 to 12.3 business 
days (P <.001). The probability that VFC deliveries 
took longer than 1 week increased from 7%  
before the VMBIP to 89% afterward. Our simulation 
demonstrates that for 7 of 11 vaccines investigat- 
ed there was a statistically significant increase in 
the number of days a provider would be without 
VFC (P <.01). 
Conclusion: Although the VMBIP was implement- 
ed to save costs, this study finds that during the 
VMBIP’s initial implementation timeline, providers 
experienced longer delivery delays and a higher 
probability of a VFC stockout. 
(Am J Manag Care. 2009;15(10)751-754)
  • Objective: To evaluate the efficacy of the centralization by the Centers for Disease Control and Prevention of their pediatric vaccine distribution system. 
  • Study Design: In March 2007, the Centers for Disease Control and Prevention began a pilot program to reform the Vaccines for Children  (VFC) program. All California VFC providers  were required to place vaccine orders under  the centralized logistic system of the Vaccine  Management Business Improvement Project (VMBIP). For this study, VFC ordering, use, and delivery data were collected from 2 large southern California healthcare providers that collectively served more than 200,000 children. Data collection occurred between January 2005 and June 2008. 
  • Methods: This case study measures the change in the mean VFC delivery times before and after the VMBIP.  The data underwent simulation to estimate the number of days per year a provider would have zero VFC inventory before and after the VMBIP. 
  • Results: After the VMBIP was implemented, delivery times increased from 1.6 to 12.3 business days (P <.001). The probability that VFC deliveries took longer than 1 week increased from 7%  before the VMBIP to 89% afterward. Our simulation demonstrates that for 7 of 11 vaccines investigated there was a statistically significant increase in the number of days a provider would be without VFC (P <.01). 
  • Conclusion: Although the VMBIP was implemented to save costs, this study finds that during the VMBIP’s initial implementation timeline, providers experienced longer delivery delays and a higher probability of a VFC stockout. 

(Am J Manag Care. 2009;15(10)751-754)

Tags: ,

Nobel Prize in Economics

October 12, 2009 in Current Events, Economics - General | No comments

Today, Elinor Ostrom of Indiana University and Oliver E. Williamson of the University of California, Berkeley won the Nobel prize in Economics.  Dr. Ostrom won “for her analysis of economic governance, especially the commons” and Dr. Williamson “for his analysis of economic governance, especially the boundaries of the firm.”

According to the N.Y. Times:

The prize committee, in making the awards, seemed to be influenced by the credit crisis and the severe recession that in the minds of many mainstream economists has highlighted the shortcomings of a unregulated marketplace, in which “economic actors,”left to their own devices, will act in their own self-interests and in doing so, will enhance everyone’s well-being.  The committee, in effect, said that theory was too simplistic and ignored the unstated relationships and behaviors that develop among companies that are competitors but find ways to resolve common problems. “Both scholars have greatly enhanced our understanding of non-market institutions” other than government, the committee said.

“Basically there is a common understanding that develops even among competitors when they are dealing with each other,” Mr. Shiller said, adding “when people make business contact, even competitors, they can’t anticipate everything, so an element of trust comes in.”

More details on the Nobel laureates, see the NobelPrize.org.

Tyler Cowen gives a nice example of Dr. Williamson’s work in practice:

“Let’s say you privatize a water system in Africa and write a 30-year contract with a private French company to run the thing.  As the contract nears its end, and if renewal is not obvious, the company has an incentive to “asset strip,” or at the very least not maintain the value of the pipes.  Alternatively, the government might signal, in advance, that it has every intention of renewing the contract.  The company then has the incentive to lower quality to consumers, since it expects renewal a and faces weaker competitive constraints.”

Marketplace has an interview with Dr. Williamson who reveals one of the most important benefits of a Nobel prize: a free university parking space.

Tags:

Characterisitcs of High Quality Clinics

October 12, 2009 in Quality | 1 comment

In his healthcare speech, President Obama cited Intermountain Healthcare in Utah and the Geisinger Health System in rural Pennsylvania as two healthcare organizations that offer high-quality care at costs below average.  In Medicare’s Physician Group Practice demonstration project, Forsyth Medical Group in North Carolina and St. John’s Health System in Missouri were able to meet all quality benchmarks.  The Marshfield Clinic in Wisconsin and University of Michigan Faculty Group Practice were able to create significant cost savings in this demonstration. The question remains, what characteristics define a high quality clinic?

This chart describes the characteristics of the 10 large physician groups that participated in the CMS demonstration.  We observe that high-quality, low-cost clinics can arise from a number of different organizational forms for instance.

  • Integrated Delivery System: Geisinger, St. John’s, Forsyth and the UM Faculty Group practice are part of an integrated system, but the Marshfield Clinic is not.
  • Includes an Academic Medical Center.  Of the above five clinics, only the University of Michigan clinic includes an academic medical center.
  • Owns an HMO: Of the above five clinics, only the Forsyth Medical Group does not own an HMO.
  • Not-for-profit: Geisinger, St. John’s, Forsyth, the UM Faculty Group, and the Marshfield clinic are all not for profit.
  • Number of Providers: The number of providers in this large group practice demonstration ranges from 200 over 1200.

Analyzing only these five clinics, one can observe that a diverse range of clinic types can provide high quality care.

Tags: , ,

The Nobel Prize in Medicine

October 9, 2009 in Current Events | No comments

The Nobel Prize in Medicine went to Elizabeth Blackburn from the University of California, San Francisco, Jack Szostak from Harvard Medical School and Carol Greider from Johns Hopkins University.  The nobel prize was awarded “for work on the existence and nature of telomerase, an enzyme that helps prevent the fraying of chromosomes and is core to new work on ageing and cancer.”  More details on the prize and a biography of each of the winners can be found here.

Tags:

Quotation of the Day

October 8, 2009 in Miscellaneous | No comments

“A strong conviction that something must be done is the parent of many bad measures.”

Tags:

CoR #89

October 7, 2009 in Carnivals | No comments

The latest edition of the Cavalcade of Risk is up at David Williams’ Health Business Blog.

The country with the largest economy and population in South-East Asia is…

October 7, 2009 in HC Statistics, Health Care Around the World | No comments

Indonesia.  Indonesia has the fourth largest population in the world and is the country with the largest Muslim population in the world.  The island of Bali–where I went for my honeymoon–is the most famous island for tourists.  Unlike most islands, it is largely Hindu.  Java, where the capital of Jakarta is located, is the most populous island in the world.  While Indonesia most recently made it into the news a week ago for the 7.6 magnitude earthquake in Sumatra, Indonesia is a country on the rise.  Other interesting facts about Indonesia:

Health

  • Government spending on health is less than 1% of GDP. 
  • Indonesia has 21 doctors per 100,000 people [compared to 163 per 100,000 in the U.S.] 
  • Data on life expectancy, infant mortality and maternal mortality compared to Indonesia’s peers is available here.
  • According to the Economist, “a public health insurance scheme for the poor, known as Jamkesmas, now covers about 76m people, nearly one-third of the population.  But Ajriani Munthe Salak, of the Legal Aid Foundation for Health, says that the poor often have to pass through a bewildering series of bureaucratic hoops to receive treatment.”  The government plans to extend Jamkesmas to all individuals in 2012.  
  • Half of all health spending in Indonesia is private.

Economy

  • Indonesia has the 15th largest economy in the world at $914 billion.  However, GDP per capita is only $3900, which ranks 155th in the world.
  • The median age is only 27.6 [compared to 36.7 in the U.S.] 
  • Indonesia’s leading trading partners are: Japan 20.2%, US 9.5%, Singapore 9.4%, China 8.5%, South Korea 6.7%, India 5.2%, and Malaysia 4.7%.
  • The national language in Indonesia is Bahasa Indonesia.  In Bali, most people speak Bahasa Bali.  Bahasa Indoneisa is “spoken as a mother tongue by very few Indonesianas at the time of independence, yet now [is] in use in almost every village.”

Tags:

Tuesday Links

October 6, 2009 in Current Events | No comments

Tags:

Why does Kaiser Permanente advertise at 24-hour Fitness?

October 5, 2009 in Health Insurance | No comments

Adverse Selection.

The firm wants to attract healthy individuals at all ages.  Gym membership may be observable, but it is difficult to observe frequency of gym visits.  By advertising at 24-hour Fitness, Kaiser Permanente’s ads have the strongest effect on those who go to the gym most frequently.  If  fitness enthusiasts decide to enroll at Kaiser, the average costs per member will decrease.  The cost decrease is not due to a more efficient health care system, but because of the healthier insured population.  Thus, Kaiser will be able to either 1) reduce premiums to increase market share or 2) increase profits.

Tags:

« Older entries § Newer entries »