Unbiased Analysis of Today's Healthcare Issues

Mid-week Links

Written By: Jason Shafrin - Dec• 23•15

Economists’ Declaration

Written By: Jason Shafrin - Dec• 21•15

In September 2015, 267 economists from 44 countries, led by Lawrence H. Summers of Harvard University, signed the Economists Declaration on Universal Health Coverage, which calls on global policymakers to prioritize a pro-poor pathway to universal health coverage as an essential pillar of sustainable development.  The full text is here.  An excerpt is below:

Universal health coverage means ensuring that everyone can obtain essential health services at high quality without suffering financial hardship. Resource constraints require individual countries to determine their own definition of “essential” – while recognizing, in the words of former World Health Organization Director-General Gro Harlem Brundtland, that “… if services are to be provided for all, not all services can be provided. The most cost-effective services should be provided first.”

The list of economists who supported this initiative is impressive.

Cancer rates in the developing world

Written By: Jason Shafrin - Dec• 20•15

NPR reports that the developing world that cancer rates are increasing in the developing world.  In fact:

The majority of cancer cases — 57 percent — now occur in low- and middle-income countries. And 65 percent of cancer deaths worldwide occur in these countries, according to an analysis by the American Cancer Society. But there’s a flip side to that story: Rates of certain cancers, including cervical cancer, have gone down in high income countries, according to the research published Monday in Cancer Epidemiology, Biomarkers & Prevention.

On the one hand, high rates of cancer are a bad thing.  On the other hand, cancer is largely a disease of old age.  Thus, improvements in treatment AIDS, malaria and tuberculosis in developing countries allows people to live longer and ‘age into’ cancer.  Although cancer is not good, dying of cancer at 70 is a significant life improvement compared to dying of a contagious disease at 30.

However, this finding highlights that health care in developing nations will increasing shift towards treating chronic conditions and diseases of old age, like cancer.

HWR is up

Written By: Jason Shafrin - Dec• 17•15

The 2015 Holiday Edition of the Health Wonk Review is up at Workers Comp Insider.  Check it out!



HWR and Kaiser

Written By: Jason Shafrin - Dec• 17•15

Kaiser Permanente is opening a medical school in 2019.  How will the school be different from current medical schools?  The L.A. Times reports:

…its approach will differ markedly from that of many established medical schools. It will hew closer to the company’s commitment of rapidly adopting new technology and adhering to the latest medical evidence in patient care.

The unorthodox move illustrates the lofty ambitions of Kaiser’s chairman and chief executive, Bernard Tyson. He strongly believes that Kaiser’s model of coordinated care is the answer for what ails the U.S medical system. Teaching that approach to young doctors could accelerate change across the country, he said.

Would Kaiser use the medical school as a pipeline for training physicians for its own practice?  Likely so.  One question would be how marketable an education from Kaiser medical school would be to non-Kaiser residency programs.  Only time will tell.

Quotation of the Day

Written By: Jason Shafrin - Dec• 16•15

“One can assemble a history of science from the solemn pronouncements of high authorities about what could not be done.”

Robert Heinlein

Mid-week Links

Written By: Jason Shafrin - Dec• 16•15

Reforming Medicare Provider Payment

Written By: Jason Shafrin - Dec• 14•15

With the ACA and now MARCA, Congress is moving full steam ahead with payment reform. An article by Paul Ginsburg and Gail Wilensky (2015) consider some of the implications of these reform efforts.

This belief – that a set of metrics can be developed or delivery systems specified that could lead to the delivery of care that would both increase quality and improve efficiency – has not been diminished by the fact that the early rounds of various demonstration and pilot projects have encountered multiple challenges and, so far, shown disappointing results.

The article makes another interesting argument on the role of benchmarks. CMS has typically recalibrated benchmarks every three years. On the one hand, this is a sensible approach. Updating the benchmarks regularly prevents the case where CMS sets poor benchmarks—and government price setting has traditionally been poor—and allows certain providers to realize large gains (or alternatively suffer large losses). The problem with this approach is that it undermines the business case for investing in efficiency.

Consider the case where a provider group spends $10,000 per patient, but is able to invest in improved efficiencies to reduce the per patient cost to $9,000. Although this seems like a good investment, it is only a good investment in the short-run. If the benchmark is recalibrated after 3 years, the provider would have lower spending below $9,000 to receive any bonus. Thus, the payback period for any efficiency improvement is likely too short.

Another complexity of implementing alternative payment systems is that there is not any one single system and these alternative payment systems need to talk to one another. Consider the following example:

[A] n orthopedic surgeon could be part of a group participating in a bundled payment for joint replacement. Some of the beneficiaries having a joint replacement with this physician may be attributed to an ACO, where the surgeon may or may not be a member of the ACO. Under current policies, CMS will subtract the savings from the joint replacement that are shared with the surgeon’s group from the savings calculated for the ACO. This avoids double payment for savings under an episode of care. But this appears to undermine a potential strategy for ACOs to achieve savings – to encourage beneficiaries attributed to the ACO to go to surgeons who are more efficient per episode of care.


Every Boston resident owes $3,000 for…

Written By: Jason Shafrin - Dec• 13•15

underfunded liabilities for city worker health care costs.  Brookings reports:

Like most American cities, Boston has promised to pay most of the health care premiums for its employees after they retire — which can be as early as age 45 or 50. Boston also subsidizes the Medicare premiums of its retired employees after age 65.

As a result, Boston reported an unfunded liability for retiree health care in 2013 of over $2 billion (that is a B!). This equated to a liability of over $3,000 per city resident — the fifth highest per capita of large American cities. And these figures did NOT include Boston’s share of another almost $2 billion in unfunded health care liabilities for retired employees from the MBTA.

The ways to decrease the deficit are not pleasant. Raise taxes on all Boston residents. Reduce eligibility for lifetime insurance based on minimum years of service (e.g., increase from 10 years to 20 or 30 years) or age (e.g., remove retirees eligible for Medicare. Decrease insurance generosity among those who do get insurance (e.g., more cost sharing).

Underfunded pension and health care liabilities are a serious problem for many U.S. cities that are likely to only get worse over the coming years.

Friday Links

Written By: Jason Shafrin - Dec• 11•15