Reactions To House Health Reform Plan: Confusion, Cheers, Concerns

http://commonhealth.wbur.org/2012/05/health-reform-reactions

Times like this separate the true health reform wonks from the wannabes. Did you spend your weekend poring through H.4070, An Act relative to Health Care Quality Improvement and Cost Reduction Act of 2012, which was finally unveiled Friday afternoon? For the hard core, this was a health cost weekend: No time for lilacs or Little League, what the heck does this thing say and what does it mean? (Here’s our initial summary.)

Though many of the bill’s proposals were long expected, reaction tended to be muted on Friday because everyone needed a chance to digest. Now, the considered analyses are beginning to roll in, and we aim to make CommonHealth their home, much as it was during the debate around the state’s 2006 health reform. The Senate is expected to weigh in with its own bill on Wednesday, and then comes the great sorting-out. Here’s a very early sampling of today’s opinion harvest, and we plan to update this post today as others come in.

Forbes: Massachusetts moves toward health care price controls; Is America next?

Goodness, ‘The Apothecary‘ blogger Avik Roy — a member of Mitt Romney’s health care advisory council, according to his Forbes profile — re-posts a bit more of CommonHealth’s bill summary than is usual blogging practice. But he does make some interesting points, including a prediction that the proposal to impose a surcharge on high-cost hospitals will backfire badly. He writes:

The beauty of government-controlled relative pricing is that it creates an incentive for everyone to raise prices. There are two ways for a high-cost provider (say, Partners HealthCare) to get their prices within the 20-percent band: (1) lower their prices; (2) get everyone else to raise their prices.

Thanks to the transparency provisions of the bill (and transparent prices are, in general, a good thing), low-cost providers will know what their peers are charging. They will therefore have the ability to raise their prices considerably.

For example, let’s say Mass General charges $32,000 for a coronary angioplasty, whereas the state median is $21,000, driven in part by low-cost Tufts, which is charging $16,000. Now that Tufts knows that MGH is charging $32,000, Tufts knows that it can charge, say, $25,000 per procedure, and still gain favorable status from insurers, without incurring the new “luxury tax.”

Once Tufts raises its price to $25,000, the “median” price for angioplasties in the state goes up, allowing MGH to raise its price further, and the cycle repeats itself.

MetroWest Daily News editorial:

Progress and confusion on health costs:

The ways of Beacon Hill can be mystifying, especially to those watching from afar. On health care costs, we appear to be moving in the right direction, but which way Beacon Hill is moving is anyone’s guess…

What is the argument about? Which elected officials and which interest groups are on which side? It’s hard to say, especially because all the players spout similar generalities about protecting consumers, restraining costs, promoting competition and moving away from the fee-for-service model. The good news, especially with the unveiling of a House bill, is that details are starting to become public.

The better news is that health cost inflation is slowing, either because of political actions or despite their lack of action. In 2009 and 2010, national health care spending grew less than 4 percent per year, federal officials report, which is the slowest annual growth in more than 50 years…

As Beacon Hill prepares to grapple with this complicated issue, one challenge is to understand what seems to be working and why. While legislation is certainly needed — some of the cost restraint shown by insurers and providers has come in response to political pressure, not structural reforms, and could disappear if politicians turned their attention elsewhere — legislators must focus on expanding things that are working. They must be especially careful not to disrupt the progress being made by insurers and providers.

Leaders must also move their debates into the public forum. Health care policy may not excite the public, but it has an impact on every Massachusetts family.

Today’s Daily Rounds already link to John McDonough’s Health Stew in the Boston Globe, headlined “Two cheers for House health financing reform bill.” John praises the plan as “far reaching and game-changing.” He also expresses this reservation:

The bill pays only lip service to prevention, wellness, and public health. We know what is the real driver of health care costs in Massachusetts and the nation — the growing burden of chronic disease, and the health behaviors that trigger it. Improving the quality and efficiency of medical care delivery can produce meaningful dividends. Nothing can produce the savings we need more than serious efforts to change health behaviors in ways that prevent and reverse chronic diseases such as heart disease and diabetes.

Section 2 of the Walsh bill throws a sop at prevention by creating a public health trust, though with no financing — the ACA, by contrast, committed $15 billion to its Prevention and Public Heath Trust, the largest such commitment in the nation’s history. The employer wellness tax credits in the House bill won’t move any needles. Even the modest proposal from the Boston Foundation to end the state’s food tax exemption for sugar-sweetened beverages and candy — which has broad public support — got ignored.

Maybe House leaders decided they would let members add prevention and public health in floor amendments. I sure hope so. It would make a solid and promising bill much stronger and better able to address all the compelling causes of our health spending challenge.

The Pioneer Institute’s Josh Archambault was quick off the mark Friday with his “Many unanswered questions on payment reform.” Today, in a post titled “I pledge my faith in bureaucracy,” he listed an array of concerns about the House bill’s proposed Division of Health Care Cost and Quality, an uber-agency that would oversee many aspects of the reform. He writes:

Policymakers should take a serious look at the wide-ranging authority given to the Division. On multiple occasions, the Division is instructed to “take actions necessary to ensure….” or “promulgate regulations or guidelines to implement the findings of this section.” We must ask if we are comfortable with bureaucrats holding the reins to 18% of our state’s economy, that may not have the expertise, resources, or shared values that we do to balance the trade offs associated with government centered cost controls. They decide where billions of dollars will be directed or granted from trust funds.  Do we trust their judgment and are we confident that industry influence will not sway these few government officials?

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