Boiling down his proposal to a few sentences, Mr. Obama asked, “How many people would like a proposal that holds insurance companies more accountable? How many people would like to give Americans the same insurance choices that members of Congress get? And how many would like a proposal that brings down costs for everyone? That’s our proposal.”

Is that really the proposal?

As for holding insurance companies more accountable, a number of state insurance commissioners have their doubts, at least with regard to federal regulation of premium rate levels.

Will we have the same insurance choices as members of Congress? Well, maybe to the extent that they can choose from a number of plans, but that is not the full set of benefits to which they are entitled.

And, as for bringing down costs, every person in the industry knows that is just not true. David Brooks explains why in his op-ed today.

From the beginning, I pointed out that Mr. Obama was over-promising when he was offering (1) a reduction in health care costs; (2) an increase in access for people currently uninsured or under-insured; and (3) maintaining choice for people in their selection of doctors and hospitals.

Opposition to Mr. Obama’s plan is often characterized as a politically motivated attack from the Republicans. Certainly, some of that is true. But some portion of the opposition also arises from this kind of overstatement, which in turn generates mistrust or at least concern among educated members of the public.

Mr. Obama is betting, though, that his energy and passion will carry the day in motivating members of Congress in his own party to muster enough votes.

The Rx-360 Consortium announced the start of a pilot plan to allow pharmaceutical manufacturers to share audits of suppliers. The first part of the pilot is intended to gauge the value of sharing the existing body of supplier audit information that already exists within consortium member companies.  The consortium has an Audit Standards Working Group with 27 participants, representing 19 companies and organizations. The group is looking at standards for APIs, excipients, supply-chain security, basic chemicals, packaging, and print.

From the Rx-360 An International Pharmaceutical Supply Chain Consortium:

“Rx-360 is a consortium being developed by volunteers from the Pharmaceutical and Biotech industry which includes their suppliers. The purpose is to enhance the security of the pharmaceutical supply chain and to assure the quality and authenticity of the products moving through the supply chain. The individuals developing this concept are working in the best interest of patients. We are a non-profit organization with the mission to create and monitor a global quality system that meets the expectations of industry and regulators that assures patient safety by guaranteeing product quality and authenticity throughout the supply chain.”

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Here’s what I see. The dominant parties in the state on whose watch the disparities in the marketplace have taken place — Blue Cross Blue Shield and Partners Healthcare System — face financial and political problems, respectively. The PHS rates that are so much higher than others’ cause a major financial drain for BCBS. They do so in the short run just by the degree of current utilization. The effect is compounded over the long run, though, as PHS has a competitive advantage vis-à-vis other systems in recruiting community-based doctors and thereby brings more and more referrals into its hospitals. That these differentials have now been made public by the state creates a political embarrassment for PHS, which has often asserted that its creation brought about substantial economies of scale through integration of care.

I suspect that these factors will lead to a negotiated agreement between BCBS and PHS, where PHS takes a bit of a haircut in its current reimbursement contracts. Not so much that it dramatically affects the PHS bottom line, but enough so that both parties can say that they have cooperatively acted to slow down the rate of health care spending in the state. Will the new rates be anywhere near the statewide average? No way. Will they do anything to offset the competitive advantage that PHS has had or will continue to have? No.

Then, BCBS will come to the rest of us (including BIDMC and our physician group) whose rates are next in line and ask for a “comparable” rate reduction. Citing the PHS deal, we will be publicly and privately pressured to make similar concessions for the good of the Commonwealth. Of course, any such rate reduction would then serve to maintain PHS’ market dominance.

Here’s my proposal instead. Let us, in the presence of the state’s Attorney General, so there are no concerns about antitrust violations, all agree to rate schedules equal to the current statewide average reimbursement rates for hospitals and doctors.* Let’s create two major categories — one for academic medical centers and their doctors to reflect the societally important teaching role — and one for community hospitals and community-based physicians.**

In other words, let us recognize that the health care reimbursement system in Massachusetts is broken. It is time to get rid of the idea that rates should reflect market power. Have them instead reflect the health status of the population, with appropriate adders for medical education or other specific programs of societal value as directed by the state. Further, if the state and federal government insist on underpaying for Medicaid and Medicare patients, let us acknowledge that amount explicitly in the approved rates for the private insurers.

I know I don’t fully understand the insurance business, but I cannot figure out why BCBS and the other insurers in the state would object to this approach. I can’t see why it is to their advantage to conduct numerous negotiations for reimbursement rates or to have different rates in place for exactly the same services.

What about quality, you might ask? Well, it would certainly be great to adjust reimbursement rates for meaningful measurements of quality of care. But let’s start first by equalizing the base rates, and then we can work on quality metrics in the next step.

—
*Or if would make more sense, perhaps a different average would be employed for the Eastern and Western parts of the state, or urban versus rural areas, to reflect regional differences in the cost of living.
** While I make this point with regard to fee-for-service payments, it is certainly a prerequisite for a move towards the kind of global, or capitated payment recommended by the state’s Massachusetts Special Commission on the Health Care Payment System. As I have noted in an earlier post: If a capitated rate were established for PHS providers today based on this differential, it would perpetually reward this health care system for its market dominance.

There was also time for John to meet several of our supporters and doctors. Here, he is briefed by Maine businessman Bobby Monks and BIDMC doctor Dr. Steven Freedman,who have been working together to develop a new patient empowerment and involvement model called “Trust”.

Humorous note: Dr. Mark Zeidel, our chief of medicine, jokingly describes Trust as a template for patient-doctor interactions that would enable a husband to offer his wife a full, complete, and detailed summary of his visit with a doctor — as opposed to the stereotypical summation:

She, “What happened and what did he say?”
He, “It was fine.”

Now, I learn that the University of Iowa Hospitals and Clinics organization is banning Facebook and other such applications as “inappropriate for the health care workplace.”

I shared this article with e-Patient Dave, who replied, “The instant killer question on this issue, from the people I talk to, is ‘So, what do they do about people doing it on their phones?’”

Indeed.

I was originally disappointed when I first scanned this Medical News Today article, Resveratrol May Replace Aspirin As Heart Protector; Longevinex® First Branded Resveratrol Pill Successfully Tested During Heart Attack.

As a red wine lover, my disappointment turned to joy when I read this:

The amount of resveratrol in 3 to 5 glasses of red wine is only about 3-5 milligrams, but the heart protective effect is believed to be produced by the total polyphenolic molecules in a glass of dark, aged red wine, ~60 milligrams per 5-ounce glass. The optimal health benefit derived from red wine is achieved at a consumption level of 3-5 glasses, which would be considerably more expensive than a resveratrol pill, and certainly pose the problem of inebriation.

In a nutshell, I get to drink red wine to, pardon the pun, to my heart’s content!

For Wine Lovers:
Wine Lovers Dishwasher Magnet

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Today, I was invited to talk with board members and senior staff at HealthSpring, a large Medicare Advantage organization serving several states in the South and Midwest. I couldn’t get there, so I joined by phone. Here’s a picture of “me” presenting to the group.

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