What do you do if you don't know anything about health policy and you've never in your life had a single original idea about how to solve any health care problem? Start a TV ad campaign, of course. (See NYT article.) 

Folks who are ordinarily on a crusade against the syllogism have discovered a new passion.  They are going to spend $40 million on a series of no-holds-barred, take-no-prisoners ads-all in favor of…. affordable health care.

No doubt the proponents of unaffordable care will run counter-ads.  Recriminations will fly.  The debate will rage.  Points and counter-points will be hurled to and fro.

Should be good fun.

Let's see if I can explain the ABCs of Medicare finance:

• Even though health care spending has been growing at twice the rate of growth of our income since the day Medicare began, the government doesn't want Medicare to grow any faster than income.

• So it sets the price of every service it pays for and allows increases from year to year no greater than national income growth.

• But, although the government controls prices, it does not control quantities; and doctors respond to price controls by expanding the number of services (more MRI scans, more blood tests, etc.)-all of which keep total spending growing at two times the growth rate of national income.

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Two states (Missouri and Georgia) allow employers to buy individually-owned health insurance for their employees.  In these states, fortunate employees will get insurance that is personal, portable, long-term, guaranteed renewable and for which they will never face premium hikes just because they happen to get sick.

Would you believe that there are 14 states that do the exact opposite?

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 Turns out, it happens all the time.  "Nurses are just starting to get to the point where they're saying, ‘I don't have to put up with this,'" says one.  NYT story here.

With tongue planted firmly in cheek, The Onion News Network's (ONN) latest lampoon [view video here] takes on the debate over uninsured children. Unfortunately, other than Uwe Reinhardt, Mark Pauly and me, no one in health policy has a sense of humor.

Some day I'm going to get around to this as well. However, Paul Krugman has offered up so many candidates it's hard to be fair to all the other columnists. In a recent entry, Krugman blames tainted spinach, poisonous peanut butter and killer tomatoes on Milton Friedman, the Republican Party, conservatives in general and basically anyone else who has any common sense.

I have analyzed this claim before [here], but this time around we get a 100-year overview. Here is history according to Krugman: Upton Sinclair's The Jungle exposed meat packers willing to poison the public with tainted meat. To stop these greedy, profit-seeking robber barons, Congress passed the Pure Food and Drug Act and the Meat Inspection Act in 1906. For the next 90 years all went well until a Republican Congress with George W. in the White House held back the regulators and let the poisoners run wild again.

Trouble is: all this is fantasy.

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This project is in the hopper as well, but Families USA has so many strong entries the chance for most other competitors is remote.

In its latest media-orchestrated broadside [press release here; study here], the organization criticizes states for lacking consumer protections-including guaranteed issue and community rating. Yet far from protecting the average consumer, these laws benefit about 5% of policy-holders while doubling the premiums paid by everyone else.

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Entry No. 1: Studies show that doctor-owned hospitals are typically more efficient and deliver higher-quality care than traditional hospitals. Further, they give doctors financial incentives to hold down costs and create opportunities to specialize in the delivery of hospital care. So what does Congress propose to do?  Close them down, of course. See New York Times story [here].

Entry No. 2: Ordinarily, Medicare pays for such items as wheelchairs, scooters, oxygen supplies, etc. by relying on a fee schedule determined by the bureaucracy rather than in the marketplace. Yet in a demo project that used competitive bidding by suppliers, Medicare's costs were lowered by 26%. So what does Congress propose to do? End the demonstration and go back to administered prices, of course. [See CMS Fact Sheet.]

This is from a previous Health Alert:

The World Health Organization (WHO) ranks the US system 37^th in the world, even trailing Costa Rica. (Costa Rica? Yes, Costa Rica.) 

On his way to get health care at the Cleveland clinic last year, Italian Prime Minister Silvio Burlusconi probably flew over a half dozen higher ranking countries, not to mention his own (rated number two!) or neighboring France (rated number 1!). What could he possibly have been thinking? Doesn't he read WHO reports?

Professor Glen Whitman (California State University) has subsequently dissected the report, non sequitur by non sequitur, and concluded:

Those who cite the WHO rankings typically present them as an objective measure of the relative performance of national health care systems.  They are not. The WHO rankings depend crucially on a number of underlying assumptions - some of them logically incoherent, some characterized by substantial uncertainty, and some rooted in ideological beliefs and values that not everyone shares.  Changes in those assumptions can radically alter the rankings.

This is from Trouble in the Ranks, published by the International Policy Network.  An earlier version was released as a Cato Institute briefing paper.

First the good news:  if physicians receive cash rewards for reducing overall hospital costs, they reduce overall hospital costs.  Amazing.  See the study in Health Affairs. [gated, but has summary]

Now, the bad news:  except for a handful of cases - receiving special dispensation from the federal government - this practice is illegal everywhere else.  (Meaning, you-could-go-to-jail illegal.)

You too can have high quality dental care for a very low price.  But only if you live in Alaska and only if you are a Native (Eskimo, Inuit, Indian, etc.).  Everyone else is barred from the market - by law.

I know what you are thinking.  Didn't the Supreme Court outlaw this sort of thing years ago?  Separate, but equal was banned in 1954.  Separate, but better is apparently okay.

Original story in the New York Times.

Some people marry for love, some for companionship and others for status or money. Now comes another reason to get hitched: health insurance. In a poll released this week, 7 percent of Americans said they or someone in their household decided to marry in the past year so they could obtain health-care benefits via their spouse.

THIS IS FROM A DETROIT NEWS STORY.

A woman's son dies in a hospital and she requests the medical records - which she is entitled to under federal law.  But the hospital doesn't comply until California's three-year statute of limitations has expired and she can no longer sue, according to a USA Today story. 

When hospitals do comply, they may play tricks.  "I see this all the time," says one expert witness.  "Pages are darkened, they are lightened, they are enlarged, shortened - put slightly down so you can't see a signature." 

A woman diagnosed with leukemia is sent to M.D. Anderson Cancer Center in Houston, according to a Wall Street Journal story:  

• She is told she can have an appointment only if she brings a certified check for $45,000.

• But the $45,000 covers only lab tests. For an admission for actual treatment, the hospital demands $60,000 more.

• A nurse refuses to change the chemotherapy bag in her pump until her husband makes another payment.

• While she is sitting on an exam table awaiting a doctor, a hospital administrator argues with her about money.

• She is charged $360 for blood-tests most insurers pay $20 or less for; $120 for saline pouches that cost less than $2 retail; and $314 for a penis clamp (to control incontinence), although she has no penis.

Since M.D. Anderson is nonprofit, it pays no taxes.  It has a $1.88 billion endowment and netted $310 million in income (profit) last year.  Contributions are tax deductible. 

On the basis of a review of the research literature, the Congressional Budget Office has concluded that "for every 100 children who gain public coverage as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children."

More than 10 million people have a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA) and these are the fastest growing products in the financial marketplace.  Withdrawals for nonhealth purposes are subject to taxes and penalties.  In order to encourage HSA growth, Congress explicitly made individual account holders responsible for accurately reporting taxable withdrawals on their income tax returns - just as they are responsible for reporting all other taxable transactions.  This is not the legal responsibility of the employer or bank issuing the HSA debit card. 

A proposal before the Ways and Means Committee would change all this.  It would force employers and financial institutions to collect paper receipts to verify the purpose of HSA expenditures - basically ending the paperless, electronic systems that are now in place.  See Roy Ramthun's analysis, attached as a comment. 

Jack Rowe (former Chairman of Aetna), Robin Downey (head of product development for Aetna) and Joe Newhouse (Aetna board member) have done a study of Aetna's CDHC plans.  Published in Health Affairs (which makes no mention of the Aetna connection for Rowe or Newhouse), the study (full text is gated) uses data not available to other researchers.  The authors' conclusion:  Aetna products work like a charm! 

(P.S. Joe Newhouse says affiliations appear at the end of the document, see comment.)

Barack Obama's health plan will fall well short of universal coverage according to an editorial by New York Times columnist Paul (you-veel-buy-zee-insurance) Krugman.  Why?  Obama's plan doesn't have enough coercion.  Obama has a counter.  Since the entire "universal coverage" discussion is about form over substance and rhetoric over reality, President Obama can sign an Executive Order just declaring that the current system (or any variation of it) is universal coverage.  Voilà! 

A new Dutch study finds that even though obese people die earlier than their thinner, fitter cohorts, their lifetime health costs are lower ($371k vs. $417k).  The healthy folks eventually die of something - cancer, Alzheimer's, etc. - and run up higher lifetime medical bills.

News of this study caused me to miss not a single step in my otherwise untroubled life.  But all those nosy Parker paternalists who want to pry into every aspect of our lives and order everybody around must be unnerved.  Fat taxes are out.  Fat subsidies are in. 

[Psst.  Don't tell a soul.  Researchers got the same results for smoking (only $326k).]

In our Handbook on State Health Reform, we created vignettes to show how much better life would be in a reformed health care system.  The Commonwealth Fund liked our idea so much they copied it for Karen Davis' Message in the latest CWF Annual Report.  (Minus my writing panache and witty sense of humor, of course.)  

The big difference: In the CWF vignettes there are no economic incentives, no patient power, no doctor power, no markets, no entrepreneurs and certainly no capitalists.  In Karen's world, supervised by benevolent government bureaucrats who always make the right decisions, good things just happen to good people.  Why didn't I think of that?

Medicare has about 7,500 specific tasks it pays doctors to perform.  E-mail is not among them.  Ditto for most Blue Cross plans, all the employer plans and most commercial insurers.  But wait…..are Aetna and CIGNA really entering the 21st century?  (DMN story)

Reimbursable e-mail is not like garden-variety e-mail, however.  It has to have a CPT code, a diagnosis, a record of time spent - in short, all the same forms, activities, categories and even payment rates as 20th century, face-to-face consultations.  It's sort of like constructing a state of the art operating room so that shamans can practice bloodletting with leeches.