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Thread: The One State Taking a Big Run at Health Reform

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    The One State Taking a Big Run at Health Reform

    I don't agree with the title of this Politico article, but it's a decent look at what Washington went through recently in passing the first 'public option' and the implications of that process for looming national reform efforts. And it's timely, given that other states are following closely behind with their own variations of the public option concept (Colorado may be next: Colorado's new public option proposal) and a federal approach, whether conceptualized as a pre-cursor to or a substitute for something more expansive, likely to be on the agenda.

    As the co-sponsor of Washington's legislation in the state Senate notes late in the article, the biggest challenge was the backlash from health care providers in response to attempts at cost containment: "'The most contentious issue is going to be, how do you compensate the providers and the hospitals?"' Frockt says."

    The One State Taking a Big Run at Health Reform
    Cody and Frockt also held out some hope of bipartisan support. Where some other public option plans call for the government to form its own insurance company, an idea many conservatives reject, Washington state would merely define standards for the program and contract private insurers to run it.
    Where Cody and other backers suspected they’d get pushback, however, was over the policy's cost-control mechanism. To force down premium costs, Washington’s public option would cap the rate at which contracted insurers could reimburse doctors, hospitals and other providers for treating public option enrollees. The cap is a key point both for the policy itself and for the politics.

    In health care policy circles, a reimbursement cap is the heart of a public option plan: In theory, it forces doctors and other health care providers to find ways to lower costs, rather than simply passing on cost increases to insurers, who pass them on to consumers in higher premiums.
    One thing Cody and other reformers realize they needed is better data about what health care actually costs to deliver, so legislators know when to hold the line on things like reimbursement rates. Cody says Washington state could benefit from something like Massachusetts's "health care cost growth benchmark" initiative, which tries to drill down into the true costs of the entire health care process—everything from the provider's actual costs and total out-of-pocket costs for patients to net costs for private insurers.
    Interesting nod to the all-in statewide health care cost growth target Massachusetts has been tracking to for the past seven years.

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    Re: The One State Taking a Big Run at Health Reform

    California now requires all state residents to have health insurance and they offer subsidies to those who cannot afford it.
    (law goes into effect Jan. 1, 2020)
    I don't know if that is exactly the same as a Public Option but California's state Medicaid, called "Medi-Cal" is maybe the most robust Medicaid plan in the country.

    It wouldn't surprise me if we eventually get to single payer out here anyway. We have more people than Canada does and they make it work. I actually believe we just might wind up doing it better than they do.

    It is the only way Californians will be able to avoid the damage being done by "45".
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    Re: The One State Taking a Big Run at Health Reform

    It's fine to talk about "forcing providers to find ways to reduce costs" but the end result of some insurers "capping costs" for their patients is typically just forcing the providers to raise the costs of other patients (by padding their bills).
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    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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    Re: The One State Taking a Big Run at Health Reform

    Quote Originally Posted by ttwtt78640 View Post
    It's fine to talk about "forcing providers to find ways to reduce costs" but the end result of some insurers "capping costs" for their patients is typically just forcing the providers to raise the costs of other patients (by padding their bills).
    That is why the only way to really get costs under control is to do like most countries and negotiate prices at a national level. Half of all healthcare markets are a monopoly with one large health system controlling the entire market. Insurers have no ability to negotiate prices in those markets, and as those providers know their consumers are captive, and that necessary healthcare demand is highly predictable in a market, they have zero incentive to reduce prices.

    The whole Medicare for All debate just ignores that. You pass Medicare for All and all you do is change who is paying for care, it doesn't do anything about costs which are driven by healthcare prices. The fact is there is a massive amount of rent seeking behavior in our healthcare system that just isn't present in other healthcare systems. All the corruption has driven healthcare costs up to almost a 5th of our GDP. Everyone wants to blame pharma, but drugs are just 10% of healthcare spending. Those on the right push HSAs, which I think do make financial sense for many households, but that is really only for primary care, which isn't expensive to begin with, and amounts to only 7% of healthcare spending.

    Point being, both parties are ignoring what drives 83% of our exorbitant healthcare costs in this country: critical and chronic care costs. That is where almost all the price gouging, rent seeking behavior and other forms of what amount to nothing more than corruption, are in our healthcare system and its why costs are out of control.
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    Re: The One State Taking a Big Run at Health Reform

    Quote Originally Posted by SouthernDemocrat View Post
    That is why the only way to really get costs under control is to do like most countries and negotiate prices at a national level. Half of all healthcare markets are a monopoly with one large health system controlling the entire market. Insurers have no ability to negotiate prices in those markets, and as those providers know their consumers are captive, and that necessary healthcare demand is highly predictable in a market, they have zero incentive to reduce prices.

    The whole Medicare for All debate just ignores that. You pass Medicare for All and all you do is change who is paying for care, it doesn't do anything about costs which are driven by healthcare prices. The fact is there is a massive amount of rent seeking behavior in our healthcare system that just isn't present in other healthcare systems. All the corruption has driven healthcare costs up to almost a 5th of our GDP. Everyone wants to blame pharma, but drugs are just 10% of healthcare spending. Those on the right push HSAs, which I think do make financial sense for many households, but that is really only for primary care, which isn't expensive to begin with, and amounts to only 7% of healthcare spending.

    Point being, both parties are ignoring what drives 83% of our exorbitant healthcare costs in this country: critical and chronic care costs. That is where almost all the price gouging, rent seeking behavior and other forms of what amount to nothing more than corruption, are in our healthcare system and its why costs are out of control.
    Before messing with matters of life and death - let's start by "negotiating" the cost of public colleges down to an affordable level. Next "negotiate" away the cap on the number of medical doctors and other medical care professionals "produced" annually by those public colleges. Those improvements in public facilities alone would produce more doctors and other medical care professionals able (willing?) to work for lower salaries.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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    Re: The One State Taking a Big Run at Health Reform

    Quote Originally Posted by ttwtt78640 View Post
    It's fine to talk about "forcing providers to find ways to reduce costs" but the end result of some insurers "capping costs" for their patients is typically just forcing the providers to raise the costs of other patients (by padding their bills).
    It's not in the interest of a provider to raise the relative premiums of the public option's competitors, since that just makes the public option more attractive to consumers, ultimately increasing its market share and share of that provider's payer mix. It may well make sense to give pricing concessions to the public option's competitors (but still somewhere north of the prices the public option pays) to keep them in the game.

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    Re: The One State Taking a Big Run at Health Reform

    Quote Originally Posted by ttwtt78640 View Post
    Before messing with matters of life and death - let's start by "negotiating" the cost of public colleges down to an affordable level. Next "negotiate" away the cap on the number of medical doctors and other medical care professionals "produced" annually by those public colleges. Those improvements in public facilities alone would produce more doctors and other medical care professionals able (willing?) to work for lower salaries.
    Let's say a specialist starts out in practice with 200k in student loans. He or she may well earn 400k to 800k a year in practice (sometimes more). Would student loans be a big burden to you if they totaled to half your annual income at most?

    In my opinion, the bigger problem is that they don't have to compete with H1Bs in the way that most professions do. That said, physician salaries are only 10% of healthcare spending in this country. Its all the rent seekers that are driving up costs, not them.

    We could go a long way if we just started with breaking up provider monopolies and mandating clear and transparent prices.
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    Re: The One State Taking a Big Run at Health Reform

    Quote Originally Posted by Greenbeard View Post
    It's not in the interest of a provider to raise the relative premiums of the public option's competitors, since that just makes the public option more attractive to consumers, ultimately increasing its market share and share of that provider's payer mix. It may well make sense to give pricing concessions to the public option's competitors (but still somewhere north of the prices the public option pays) to keep them in the game.
    It may also force some care providers to simply no longer accept patients with that "public option" brand of insurance. I see this with Medicare supplemental (PPO) plans now - a given care provider may accept 1/3 (or less) of those insurance plans available for sale in that region.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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    Re: The One State Taking a Big Run at Health Reform

    Quote Originally Posted by SouthernDemocrat View Post
    Let's say a specialist starts out in practice with 200k in student loans. He or she may well earn 400k to 800k a year in practice (sometimes more). Would student loans be a big burden to you if they totaled to half your annual income at most?

    In my opinion, the bigger problem is that they don't have to compete with H1Bs in the way that most professions do. That said, physician salaries are only 10% of healthcare spending in this country. Its all the rent seekers that are driving up costs, not them.

    We could go a long way if we just started with breaking up provider monopolies and mandating clear and transparent prices.
    Nope, labor costs are a significant part of the problem.

    Labor represents about 60 percent of hospital costs and is the greatest driver of operating expenses.
    Hospitals Target Labor Costs, Layoffs to Reduce Healthcare Costs
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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    Re: The One State Taking a Big Run at Health Reform

    Quote Originally Posted by ttwtt78640 View Post
    Nope, labor costs are a significant part of the problem.



    Hospitals Target Labor Costs, Layoffs to Reduce Healthcare Costs
    Yeah but it's not the doctors, it's everyone else. Hospital care by it's very mature is labor intensive.
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