Posts I liked this year:
Pareto proportions in healthcare
A small minority of people drive the vast majority of costs and utilizations. Conversely, most people are minimal users of healthcare services in any given year. This means there are two very distinct strategies that should promote good outcomes.
Reference Pricing tweak for Medicaid
Under my plan, the Medicaid beneficiary would receive a bonus check for a good choice. The check would be a portion of the difference between the bundled reference price and the regional average price
Distributional Impacts of different cost share methods
Deductible plans favor the sickest people as the low utilizers pay for almost all of their care via deductible cash. That means a comparatively high proportion of the pool’s individual responsibility amount is borne by healthy people.
the desire to use Medicare as the basic structure of a national single payer system as it is a pre-exisiting program whose skeleton is strong enough to build on. However that skeleton has some odd deformities to it, and a lot of trade-offs have been built into Medicare that would need to be re-examined if we were to massively expand Medicare’s scope…. as Medicare E is not a matter of simply printing up new ID cards and mailing them to everyone in the country with a start date three months from the mail date
If the Finance and Accounting folks want Mayhew Insurance to increase profit margins by $5 PMPM (which is a massive increase for an increasingly low margin business), premium price increases are a low priority solution because they have significant costs. Instead we’ll see if we can craft a special narrow network which will be very attractive to people with very low utilization but we can charge a couple of extra bucks PMPM while still holding our relative Silver position, we’ll see if we can reduce mail expenses again by a dime PMPM, we’ll see if switching our preferred Hep-C cure to Harvoni instead of Solvadi reduces costs by a quarter PMPM, we’ll see if we really need a VP for Employee Morale (hookers and blow section),
Cash flow of rejecting free money
If we assume that the net federal spend per person who is Medicaid eligible is roughly the same plus or minus a reasonable amount, the net economic loss to a rejection state is “only” the amount of Medicaid spending that is available to cover people who make under 100% FPL as well as those people over 100% FPL but under 138% who would have signed up for Medicaid but did not sign up nor continue to pay their premiums for an Exchange policy.
That number is significantly smaller than Brad Delong’s .7% GDP, probably closer to 0.5% GDP.
A wonky post on how provider networks are built
Competition, how does it work again
a symptom of the extremely dysfunctional nature of the individual insurance market before PPACA. It was a vampire that drank blood in quarts and very rarely paid benefits as it specialized in very high deductible policies with significant coverage limitations and short term contracts. The old business model was based on churn, it was based on cherry picking, and it was based on very low medical expense ratios
A summary of an NBER paper examining care costs after a switch to an HDHP. There were no big explosions of costs three years out. This is making rethink HDHP to some degree.
Wyden Waiver, New CSR Attachment Points
Currently, CSR is only attached to Silver plans. What if states decided to change their subsidy attachment point as part of the Wyden Waiver?
If a state decided to look at the total cost of providing the second lowest Silver in determining subsidy levels instead of just looking at the second lowest premium for Silver, average actuarial value would increase as choice space increases. The change in subsidy formula would be the sum of premium plus CSR subsidy cost minus the individual contribution = subsidy.
Healthcare 2.0 Breaking trusts and building markets
On the health insurance side, margins are already fairly low, and there is some fat left to cut, but not much. On the provider side of the equation, there is plenty of fat left to cut on the basis of international comparisons. The major areas where the Democratic Party can get a lot of money out of the US healthcare system is on high end provider payments, drug costs and hospital payments while also expanding the lower levels of basic but very valuable care. Right now the US health system has numerous guilds and other anti-competetive practices in place which protect small, concentrated and powerful groups’ incomes while screwing the broader society by ringing up much higher healthcare costs without delivering amazing value in return.
Yutsano
明けましておめでとうございます！Since it is the new year in Japan!
Yutsano
Huh. My post went down the rabbit hole. Nice to know FYWP still acts the same!
Chyron HR
Richard, question. If someone’s health insurance coverage changes on January 1, when exactly do they stop being covered under the old plan and start being covered under the new plan. Midnight? If so, midnight where?
Richard Mayhew
@Chyron HR: Good question
In 98% of cases it is local midnight of 12/31 going into 1/1
inpatient admissions from the ER are funky, but I don’t know the exact details.
wvng
My wife and I, fortunately, fall into the category (so far) of “minimal users of healthcare services in any given year.” So we can get Bronze plans through the exchange and be very happy with the result – paying very little in premiums and practically nothing in health care expenses because we don’t have any. So the higher deductibles do not matter to us; we are well covered for major expenses should they happen and that is what we need.
But I see the people who have the combination of permanent health problems/expenses and fairly low income as having a huge financial problem, no matter what coverage they get through an exchange. I don’t know how they absorb the costs, year after year. And I don’t know how the system can be designed help them.
dr. bloor
If the FPers ever adopt avatars around here, yours must be Louis Tully from Ghostbusters.
Happy New Year.
japa21
@Richard Mayhew: That generally depends on what the contract between the hospital and insurance company states. But generally, a single episode of treatment (ER to inpatient to discharge) would be covered by the policy in effect at the time of onset of treatment. If admission took place after midnight, however, the first policy might well cover the ER services and the new policy pick up the inpatient.
The real issue becomes if the hospital was in-network with the first insurance but out of network with the new insurance.
Rashi
You’re liking your own posts? You’re like the Kanye West of healthcare.
Richard Mayhew
@Rashi: I wrote 200+ things on healthcare this year. Some were fluff, some were mistakes, some were timely but ephemeral, and some are sticking with me and made me change how I think…
Rashi
@Richard Mayhew: Then onward ho!
David Koch
@Richard Mayhew: You column was one of my favorite things. Also your contributions to this year’s World Cup threads.
amygdala
Hi Richard:
Long-time lurker decloaking to thank you for your posts. I’m a doctor who retired earlier this year after a couple of decades working in a public safety net hospital. The upside of such places is being able to help people in particular need and relative protection from some of the time-consuming hassles of modern medical practice. Downsides: front-row view of what pre-existing condition clauses did (past tense!) to people and the constant reminder that society’s inequities play out daily in health care, the very place where they should go away.
A lot of doctoring is applying and communicating a somewhat arcane information to people who have other and better things to do with their time. I’m grateful that you do this too, and so well, with your experience and knowledge from the payer perspective. Your posts and Twitter feed have taught me a lot, and I am grateful.
The relationship, as you no doubt know, between clinicians and third-party payers can be pretty hostile. It has been gratifying seeing someone on the “other” side helping commenters facing tough coverage decisions, devoting real effort to educating us all, and pondering population-level solutions. Outside of public health pros, doctors tend to think about the patient (singular) in the office exam room or hospital bed or on the ED gurney. That’s important, and how we are educated and trained, but needs to be balanced with the high-flyover view so that good, timely care is available for everyone who wishes to avail themselves of it.
Me, I’d like a hybrid of the Canadian and French systems, but when HillaryCare died in the early 90s, I realized I’d never see either in my professional or biological lifetimes. The ACA isn’t perfect, but in the current political environment, was the best stably achievable option. I still worry that Republicans will manage to gut it irretrievably, but hope it can be tweaked and improved to adapt to local needs. It’s worth remembering that HealthCanada has its roots in provincial-level care.
Again, thank you. Happy New Year to you and the Balloon Juice community.