Comments for Code Red

Comment on Are Employers to Blame for our High Medical Prices? by Henry Ergas

Henry Ergas — Sun, 16 Jun 2013 21:14:05 +0000

Yes, agreed — all businesses can profit by eliminating unnecessary costs. But most businesses face intense competition in product and labor markets and so will pass those savings on. Agree too that it makes perfect sense for them to outsource those savings (presumably, they would check from time to time they are getting the best deal); and also agree that if workers perceive cost reduction as quality reduction, that will lead to less than perfectly efficient investment in cost reduction.

Comment on Are Employers to Blame for our High Medical Prices? by dranove

dranove — Sun, 16 Jun 2013 21:09:29 +0000

I think I am arguing just the opposite of your point. Any business that can get a cost advantage over rivals will profit, regardless of the degree of competition. That includes procuring labor benefits at a lower cost. Thus, employers do have an incentive to reduce health benefit costs without reducing benefit quality. But they appropriately outsource the effort to reduce costs to insurers. At the same time, employers recognize that some cost reducing efforts, like shifting workers to HMOs, may be perceived by workers as a reduction in benefit quality, which would require them to raise wages to offset. This hamstrings some cost reducing efforts.

Comment on Are Employers to Blame for our High Medical Prices? by Henry Ergas

Henry Ergas — Sun, 16 Jun 2013 20:27:03 +0000

Your broad argument makes good sense but you to some extent want to have it both ways. Presumably, it is competition that ensures employers have incentives to focus on the cost of the plans; yet you suggest they pocket any savings. That implies competition in product and labor markets is relatively weak (so it is only competition in the market for corporate control that keeps managers focused on costs) — which seems unlikely to be true for the vast majority of employers.

Comment on The Rest of the Story about Hospital Pricing by dranove

dranove — Thu, 06 Jun 2013 17:31:50 +0000

ER charges seem to be completely arbitrary. I hope that the insurer negotiated for good discounts and any cost sharing was minimal. What your daughter’s experience also points out is the dearth of information about quality of care. We should not confuse high prices with high quality.

Comment on The Rest of the Story about Hospital Pricing by Sara Bernstein

Sara Bernstein — Thu, 06 Jun 2013 03:05:44 +0000

My daughter is a school teacher insured through a large insurance company. She has a nut allergy and unfortunately had 2 trips to ER’s for reactions to nuts that should not have been in her food. The ER visits were in the same city about 6 weeks apart. One hospital charged about $6000, the other about $900. She was at the first hospital for less time and actually got less care.

Comment on Unleashing Innovation in Healthcare Markets by Axiom Health Seo for Foctors

Axiom Health Seo for Foctors — Thu, 09 May 2013 14:20:44 +0000

Absolutely… The changes are unavoidable. This past month I was at a Medical Marketing Summit in Orlando. Its a very interesting observance in how the marketing is changing for the medical practices around the world. Larger marginal changes will certainly take place within the next few years. Also wondering how the market will change for those marketing the medical practices. Especially on the search verticals.

Comment on Restoring Medicare Advantage Payment Rates: A Lesson in Procurement by dranove

dranove — Fri, 05 Apr 2013 22:40:34 +0000

I don’t know if CMS wants the monopsony so much as the Obama administration does. But yes, the current political pressure (from an interesting mix of Democrats and Republicans) has forestalled that possibility.

Comment on Restoring Medicare Advantage Payment Rates: A Lesson in Procurement by Brad F

Brad F — Fri, 05 Apr 2013 22:11:57 +0000

David
–If I understand you correctly, for political reasons, CMS reversed their end run around the MA plans by overturning the cuts.
–Long ball, they desire to put MA plans out of business to acquire monopsony power?
–And the rates, while too generous in the past, now have become too stingy.
–But CMS cut anyway, again for power
–They lost round one?

Is that right?

Brad

Comment on The PROMIS of Market Forces by dranove

dranove — Fri, 15 Mar 2013 23:55:56 +0000

Points taken. And I can add that PROMIS affords new opportunities for gaming. (I think about how my car dealer always implores me to give it perfect scores on the survey of customer satisfaction.) PROMIS is one of several hard measures that may be used, but ultimately I think it is the soft measurement by good managers that will drive quality.

Comment on The PROMIS of Market Forces by Brad F

Brad F — Fri, 15 Mar 2013 23:31:32 +0000

Elderly folks, think duals (I care from them frequently), would have a heck of time with some of these questions. I emphasized the 80/20 aspects because we want to shine a light on the costliest beneficiaries–treatments for these folks have the greatest impact on system resources and costs, as you know.

All in all, harder than you think. Instruments for surrogates need validation as well. But then again, maybe when you refer to entrepreneurial spirit, you imply those kinds of fixes.

Thanks for engaging
Brad