There’s lots of bad ideas floating around on how to lower health care costs. While we’re focusing on real, fundamental reforms of the payment and delivery systems, as part of the Massachusetts Campaign For Better Care (see our spiffy new logo, at www.hcfama.org/bettercare) others are grasping for gimmicks.
Senate Candidate Scott Brown has focused on mandated benefits, which contribute little to health care cost growth.
For some small business groups, the answer is “association health plans.” The hope is that if small businesses can ban together, they will be able to obtain better prices from insurers. This idea has been repeated rejected by the legislature, which understands that for an association to get better rates, it would have to limit its membership to only those who are healthier than average. The result would be higher rates for everyone else, and a disrupted market. Insurance works if the risk pools are large and heterogeneous, not stratified into segments.
The latest incarnation of this idea is to form small business “cooperatives,” which is a new name for basically the same plan. The Division of Insurance has been looking into the idea, as part of its investigation into the small business health insurance market.
In December, HCFA joined a broad group of organizations to provide in-depth information and analysis to DOI, opposing the co-op plan. The signers ranged from Nancy Turnbull, Associate Dean at the Harvard School of Public Health and the consumer representative on the Connector Board, to the Association of Health Plans and Blue Cross Blue Shield. Last week the group sent a follow-up letter, responding to some of the points made by proponents.
The groups signing the letter don’t always agree on health insurance issues. However, on this issue we are allies because the result of permitting cooperatives would inevitably be a significant disruption in the market and increased premium rates for the majority of small employers and individuals. The creation of one or more cooperatives would undermine important insurance reforms implemented by the Legislature over the last two decades to guarantee availability and renewability of health coverage and the creation of broad and stable insurance rating pools.
We need to address the underlying factors that cause rising health care costs- this includes comprehensive delivery system reform- and focus on sustainable cost containment for all Massachusetts residents.
– Georgia Maheras and Brian Rosman
“Insurance works if the risk pools are large and heterogeneous, not stratified into segments.”
Met Life and New York Life have offered preferred rates for healthier people for decades.
Get a clue!!!
If we are mandating that people buy insurance, then healthier people forced to buy insurance against our will, like myself, should be able to buy insurance at preferred rates, just as we are able to buy life insurance at preferred rates.
Wow. The truth about the mandate finally came out. Only the naive would buy the crock about uninsureds flocking to ERs because they can’t afford the doctor (I’ve never seen the inside of an ER, and have always paid by cash for all my medical care).
No. The real reason that you insurance advocates want us to sign up is so that you can eat all the steaks you want, smoke all you want, and drink all you want, and get us to subsidize you!
I guess you should get all “safe driver” auto insurance banned, as well as preferred, non smoker life insurance rates banned, with your twisted logic.
Interesting to note that the GIC, which is an association of all state (and now some municipalities and school districts) agencies, is promoted by the legislature and others as a way to control costs and the rate of increase. Only the Mass Bankers Association, which got special legislative treatment is able to enjoy the benefits of group purchasing, law of large numbers, and experience (not community) rating. If they are such a bad idea, why can these two successful examples perform better? The real reason is that the insurance companies will no longer be able to charge small businesses higher than required rates to subsidize the artificially low rates on Commonwealth Care, etc.
While we are talking about health care myths, it’s worth pointing out that another one is the contention that malpractice awards and premiums are a major source of health care costs. A 2004 report by the Congresional Budget Office estimated that malpractice awards and premiums are less than 2% of overall health-care spending. Most good studies (including the CBO report) have come to the conclusion that defensive medicine–overtreatment from fear of malpractice–is quite small and that overtreatment is caused mostly by the income that it generates for physicians. Tort reform in the states that have enacted it hasn’t changed health care cost trends, which gives evidence that this is correct. Researchers at Northwestern recently did a study of the effect tort reform in national health reform would have on health care costs, based on the experience in the many states that have enacted such reforms in recent years. The conclusion was that national reform woould reduce health care costs by about 2%. 2% of $2.5+ trillion dollars is serious money, but with spending growing much faster than that every year, it’s hardly going to solve our health care spending problems.
The much more serious problems with our malpractice system are that it doesn’t work well to protect patients or to improve quality (e.g., most patients who are harmed never receive any compensation). So it’s worth focusing on reforms that will make the system more equitable and help improve quality of care. Some good ideas out there (like the health care courts proposed by Michelle Mello and colleagues: see this podcast for more information:http://www.rwjf.org/pioneer/product.jsp?id=20391).
“see our spiffy new logo”
Just who is it that is grasping for gimmicks?
How much did it cost for that logo?
How does the logo provide health care?
How does the logo lower health care costs?
Dumbfounded
We need to but a clamp on malpractice costs. If we did that than Doctors would no longer need to order 87 tests to protect themselves driving up the cost of medicine.