Most of you know that I live, work, and practice in Minnesota....which has one of the most liberal practice acts for PA's. I can prescribe Sched II-V, and basically do pretty much anything as long as it is allowed in my practice agreement, and is within my physicians practice standards. In EM, that covers a lot.
However, I also practice in an academic environment, which I enjoy for the most part, however, there are some detractions as well. I get to precept MS III's and IV's, and teach the residents occasionally, but too often, procedures will get passed to the residents. Not LP's of course, as I have done more of those than I ever care to think about, but chest tubes, intubations, and central lines often get re-assigned to the residents. I understand that they need to complete so many, as part of their training, but sometimes I like to do those things as well. At my other ER's I occasionally do them, and as I usually tell PA students, knowing WHEN, and WHY you want, or need to do these procedures is 1000 times more important than actually doing them.
I'm also heavily vested in research, particularly physician/medical workforce issues.
Occasionally, however, my faith is rewarded. Recently I got to do an elective cardioversion in the ED. Propofol sedation, Fentanyl, 100 joules biphasic, and BAM....NSR.
At another ER, I recently had to intubate someone as well. So, while the opportunities may be more limited than some of the EM PA's who work in non academic environments, I am for the most part, happy as a clam at mine.
Saturday, April 10, 2010
Friday, April 9, 2010
Interstate Insurance competition.....
Another fancy reform gadget that is thrown around by both parties is the concept of “increased competition”, as if Adam Smith’s magical hand will wave over the marketplace and prices/premiums will magically lower. It is not true for a number of reasons, but a real discussion of free market economics in healthcare can wait for another day. Today, we will discuss insurance competition. There is much to discuss, although interstate competition has not been allowed, there is often substantial instate competition.
The health insurance market has been traditionally regulated in a federalist model with each state being responsible for various regulations, including coverage limits, financial solvency of both the individual, as well as the insurance company, and to help protect against fraudulent behavior, ensuring that members/enrollees are provided the benefits as promised. State regulations have also imposed rating, and rate banding legislature to prevent health insurers from charging too much for certain “high risk” patients (Kofman, Pollitz, 2006). Additionally, there is variance between states as pertains to a “guarantee of issue”, as many states have different qualifications, this could potentially destabilize the market by causing an asymmetry, as sicker patients would not likely qualify for out of state insurance, while healthier patients could opt for cheaper out of state plans. Kofman and Pollitz also describe how the detection, and prosecution of fraudulent activity would be quite difficult, and might even raise some state constitutionality issues when trying to enforce different state laws. This creates a murky situation at best, and potentially exposes many patients to fraud, and potential predatory pricing tactics, as well as many companies to unfavorable market conditions. As mentioned above, another potential problem that arise with sales of health insurance across state lines, is the risk of creating an adverse risk pooling. Health insurance, like any other insurance commodity, relies on pooling of risk, meaning that costs need to be spread across both sick and healthy people in order to maintain a stable economic foundation. By allowing the sale of insurance across state lines, out of state insurers will get to “cherry pick” individuals, and because there is no guarantee of issue for an out of state transaction, healthier individuals may be offered lower rates than they can obtain locally, while sicker individuals will be denied coverage. This will result in the in-state insurers covering an increasing percentage of sick individuals resulting in an adverse risk selection bias. This will undoubtedly cause prices to rise in-state, and overall health insurance premiums will increase as a result. This is especially important when we realize that only 5% of our population accounts for 49% of healthcare spending (Stanton M, 2006). By denying insurance companies that ability to pool risk, and to spread healthcare costs throughout a specific population, they will have no choice but to increase premiums for those who are sick, or have chronic medical conditions. When we examine the interstate sales of health insurance, it appears on the surface to be a good idea, however, real time examination of current markets may reveal otherwise. An important concept in financial exchanges is leverage, and companies and institutions will attempt to use whatever leverage is available to negotiate better financial terms. In healthcare, this frequently occurs between health insurers and healthcare providers/institutions. When one party gains leverage on the other it is used to either raise, or lower prices depending on the entity involved. When we look at certain markets, as BNET reported, for example Milwaukee, where there is no dominant insurance company, leverage is given to the healthcare providers and hospitals, and many physicians will not accept less than 200% of Medicare rates, in contrast to a nearby city like Chicago, where typical payments for private payers are only 112% of Medicare rates (Terry K, 2009). Which raises an interesting dilemna.
Providers in the example provided via BNET, are actually driving costs higher, due to decreased market share in the insurance industry. I got all excited, and actually though of doing this as a full on study, using the Herfindahl index and getting to play around with some fancy math, but the NBER beat me to it...unfortunately, they found that an increased concentration in the marketplace, could only account for an increase of 2% in premiums over an 8 year time span, with health insurance premiums rising an average of 10% or more per year over that same time period.
PAPER HERE
We examine whether and to what extent consolidation in the U.S. health insurance industry is leading to higher employer-sponsored insurance premiums. We make use of a proprietary, panel dataset of employer-sponsored healthplans enrolling over 10 million Americans annually between 1998 and 2006 to explore the relationship between premium growth and changes in market concentration. We exploit the differential impact of a large national merger of two insurance firms across local markets to estimate the causal effect of concentration on market-level premiums. We estimate real premiums increased by 2 percentage points (in a typical market) due to the rise in concentration during our study period. We also find evidence that consolidation facilitates the exercise of monopsonistic power vis a vis physicians, whose absolute employment and relative earnings decline in its wake.
The health insurance market has been traditionally regulated in a federalist model with each state being responsible for various regulations, including coverage limits, financial solvency of both the individual, as well as the insurance company, and to help protect against fraudulent behavior, ensuring that members/enrollees are provided the benefits as promised. State regulations have also imposed rating, and rate banding legislature to prevent health insurers from charging too much for certain “high risk” patients (Kofman, Pollitz, 2006). Additionally, there is variance between states as pertains to a “guarantee of issue”, as many states have different qualifications, this could potentially destabilize the market by causing an asymmetry, as sicker patients would not likely qualify for out of state insurance, while healthier patients could opt for cheaper out of state plans. Kofman and Pollitz also describe how the detection, and prosecution of fraudulent activity would be quite difficult, and might even raise some state constitutionality issues when trying to enforce different state laws. This creates a murky situation at best, and potentially exposes many patients to fraud, and potential predatory pricing tactics, as well as many companies to unfavorable market conditions. As mentioned above, another potential problem that arise with sales of health insurance across state lines, is the risk of creating an adverse risk pooling. Health insurance, like any other insurance commodity, relies on pooling of risk, meaning that costs need to be spread across both sick and healthy people in order to maintain a stable economic foundation. By allowing the sale of insurance across state lines, out of state insurers will get to “cherry pick” individuals, and because there is no guarantee of issue for an out of state transaction, healthier individuals may be offered lower rates than they can obtain locally, while sicker individuals will be denied coverage. This will result in the in-state insurers covering an increasing percentage of sick individuals resulting in an adverse risk selection bias. This will undoubtedly cause prices to rise in-state, and overall health insurance premiums will increase as a result. This is especially important when we realize that only 5% of our population accounts for 49% of healthcare spending (Stanton M, 2006). By denying insurance companies that ability to pool risk, and to spread healthcare costs throughout a specific population, they will have no choice but to increase premiums for those who are sick, or have chronic medical conditions. When we examine the interstate sales of health insurance, it appears on the surface to be a good idea, however, real time examination of current markets may reveal otherwise. An important concept in financial exchanges is leverage, and companies and institutions will attempt to use whatever leverage is available to negotiate better financial terms. In healthcare, this frequently occurs between health insurers and healthcare providers/institutions. When one party gains leverage on the other it is used to either raise, or lower prices depending on the entity involved. When we look at certain markets, as BNET reported, for example Milwaukee, where there is no dominant insurance company, leverage is given to the healthcare providers and hospitals, and many physicians will not accept less than 200% of Medicare rates, in contrast to a nearby city like Chicago, where typical payments for private payers are only 112% of Medicare rates (Terry K, 2009). Which raises an interesting dilemna.
Providers in the example provided via BNET, are actually driving costs higher, due to decreased market share in the insurance industry. I got all excited, and actually though of doing this as a full on study, using the Herfindahl index and getting to play around with some fancy math, but the NBER beat me to it...unfortunately, they found that an increased concentration in the marketplace, could only account for an increase of 2% in premiums over an 8 year time span, with health insurance premiums rising an average of 10% or more per year over that same time period.
PAPER HERE
We examine whether and to what extent consolidation in the U.S. health insurance industry is leading to higher employer-sponsored insurance premiums. We make use of a proprietary, panel dataset of employer-sponsored healthplans enrolling over 10 million Americans annually between 1998 and 2006 to explore the relationship between premium growth and changes in market concentration. We exploit the differential impact of a large national merger of two insurance firms across local markets to estimate the causal effect of concentration on market-level premiums. We estimate real premiums increased by 2 percentage points (in a typical market) due to the rise in concentration during our study period. We also find evidence that consolidation facilitates the exercise of monopsonistic power vis a vis physicians, whose absolute employment and relative earnings decline in its wake.
Let's talk tort reform....
Lot’s has been said about the holy grail of tort reform by those in the medical field. The problem is, most of it isn’t true. Physicians and providers are very good at assigning the blame for rising costs on every one else. We are good at describing the “evil” insurance companies, and “greedy” pharmaceutical companies (partly true here), and those “bastard” lawyers. However, this blame game ignores the fact that while all of those players are culpable to a degree, it is the provider that also shares a significant amount of blame for cost increases.
Tort reform is currently the shiny object over in the corner of the room. That’s not to say that it can’t help, but the latest CBO estimates are a savings of 54 billion over ten years, or roughly 5.4 billion per year. In a 2.4 trillion dollar healthcare system, that doesn’t amount to much. Latest estimates are 0.5% savings. I would posit, that perhaps it might be closer to 1% once defensive practices are slowed. However, I don’t think the CBO is too far off here.
Let’s look at Texas, in 2003, they introduced the most aggressive tort reform legislation to date in the US. It is true that this reform, after 2003 lowered malpractice premiums, and increased physician supply to the state. However, Texas, since 2004 has seen a growth in testing expenditures that has outpaced the national average by more than 50% (Arkush, Gosselar, Hines, Lincoln, 2009). Additionally, the same report found that Medicare spending per patient had doubled between 2003 and 2007, in contrast to the decline in Medicare spending that was noted prior to the laws enactment. They also found that Texas has the highest rate of uninsured patients in the country, both prior to the law, and accelerating after the law was passed. The additional physician presence has only increased because of an increasing population as well, and there was only an increase of 0.4 physicians per capita after the law was passed. In addition, ACEP gave Texas an “F” on access to emergency care in 2009. Lastly, the National Board of Economic Research (NBER) commissioned a comprehensive study, which concluded that a targeted reform may have some impact, but that overall, it would be neglible (Lakdawalla, Seabury, 2009). Additionally, they found that for every 10 percent reduction in medical malpractice costs related to liability, there is a 0.2% increase in patient mortality. The NBER article is particularly poignant, and I have posted the summary here, as the article is 60 pages long, and the economic math is quite intensive.
HERE
The impact of liability for medical malpractice on the cost of medical care has been one
of the highest profile issues in debates over the U.S. health care system for many years.
Malpractice payments have grown enormously over the past 15 years, but this has likely had a
modest impact on the cost of health care in the US. It may have other significant effects, such as
decreasing the supply of physicians or changing the nature of treatment. Our findings, however,
suggest that limiting malpractice liability is no panacea for rising health care costs.
Moreover, while the mortality benefits of malpractice may be quite modest, these seem
more likely than not to justify its direct and indirect health care costs. Therefore, we conclude
that — for values of statistical life traditionally employed by US regulators —reducing
malpractice costs is not likely to be a worthwhile policy goal in itself. As emphasized by Currie
and MacLeod (2008), however, specific policies must be evaluated on a case-by-case basis, as
they can have unexpected effects on physicians’ expected liability and incentives. In addition,
there may be policies that reduce malpractice costs but have other social benefits; we do not rule
those out, but note that the case for their adoption rests on their auxiliary effects.
At a minimum, our analysis reveals the tenuousness of the case for tort reform, but it is
important to note its limitations. First, we account only for impacts of tort reform on medical costs and mortality, excluding its impacts (if any) on morbidity, physician utility, and patient
satisfaction. These quantities are extremely difficult to measure objectively. In addition, we do
not account for the adjustment costs (e.g., on the utilization of the health care system) that would
be induced by any large-scale reform project. The size and even direction of these excluded
effects is not clear. Finally, even if we ignore these limitations and accept the estimates at face
value, the probabilistic nature of our analysis means we cannot rule with (even approximate)
certainty for or against tort reform over conventionally accepted values of life.
Putting our results together with earlier work suggests that malpractice may have
substantial impacts on the care and costs of specific patient subgroups — like heart attack
patients — but much more modest impacts on the average patient, and on health care spending as
a whole. Future research should endeavor to determine whether tort reform can be targeted
toward these subgroups in a cost-effective manner.
Another important avenue for future work is to evaluate whether malpractice has effects
on more fine-grained outcomes in the health care system, such as morbidity, disability, or the
nature of care delivery. Medical costs and mortality are likely to be the first-order costs and
benefits of changes to the malpractice system, but the auxiliary effects may be quite significant.
If, for example, malpractice risk has had limited impacts on costs but appreciable positive
impacts on average outcomes other than mortality, the malpractice “crisis” may be anything but.
If, on the other hand, it has negative impacts on outcomes, the major costs of malpractice may be
in health rather than in dollars.
Tort reform is currently the shiny object over in the corner of the room. That’s not to say that it can’t help, but the latest CBO estimates are a savings of 54 billion over ten years, or roughly 5.4 billion per year. In a 2.4 trillion dollar healthcare system, that doesn’t amount to much. Latest estimates are 0.5% savings. I would posit, that perhaps it might be closer to 1% once defensive practices are slowed. However, I don’t think the CBO is too far off here.
Let’s look at Texas, in 2003, they introduced the most aggressive tort reform legislation to date in the US. It is true that this reform, after 2003 lowered malpractice premiums, and increased physician supply to the state. However, Texas, since 2004 has seen a growth in testing expenditures that has outpaced the national average by more than 50% (Arkush, Gosselar, Hines, Lincoln, 2009). Additionally, the same report found that Medicare spending per patient had doubled between 2003 and 2007, in contrast to the decline in Medicare spending that was noted prior to the laws enactment. They also found that Texas has the highest rate of uninsured patients in the country, both prior to the law, and accelerating after the law was passed. The additional physician presence has only increased because of an increasing population as well, and there was only an increase of 0.4 physicians per capita after the law was passed. In addition, ACEP gave Texas an “F” on access to emergency care in 2009. Lastly, the National Board of Economic Research (NBER) commissioned a comprehensive study, which concluded that a targeted reform may have some impact, but that overall, it would be neglible (Lakdawalla, Seabury, 2009). Additionally, they found that for every 10 percent reduction in medical malpractice costs related to liability, there is a 0.2% increase in patient mortality. The NBER article is particularly poignant, and I have posted the summary here, as the article is 60 pages long, and the economic math is quite intensive.
HERE
The impact of liability for medical malpractice on the cost of medical care has been one
of the highest profile issues in debates over the U.S. health care system for many years.
Malpractice payments have grown enormously over the past 15 years, but this has likely had a
modest impact on the cost of health care in the US. It may have other significant effects, such as
decreasing the supply of physicians or changing the nature of treatment. Our findings, however,
suggest that limiting malpractice liability is no panacea for rising health care costs.
Moreover, while the mortality benefits of malpractice may be quite modest, these seem
more likely than not to justify its direct and indirect health care costs. Therefore, we conclude
that — for values of statistical life traditionally employed by US regulators —reducing
malpractice costs is not likely to be a worthwhile policy goal in itself. As emphasized by Currie
and MacLeod (2008), however, specific policies must be evaluated on a case-by-case basis, as
they can have unexpected effects on physicians’ expected liability and incentives. In addition,
there may be policies that reduce malpractice costs but have other social benefits; we do not rule
those out, but note that the case for their adoption rests on their auxiliary effects.
At a minimum, our analysis reveals the tenuousness of the case for tort reform, but it is
important to note its limitations. First, we account only for impacts of tort reform on medical costs and mortality, excluding its impacts (if any) on morbidity, physician utility, and patient
satisfaction. These quantities are extremely difficult to measure objectively. In addition, we do
not account for the adjustment costs (e.g., on the utilization of the health care system) that would
be induced by any large-scale reform project. The size and even direction of these excluded
effects is not clear. Finally, even if we ignore these limitations and accept the estimates at face
value, the probabilistic nature of our analysis means we cannot rule with (even approximate)
certainty for or against tort reform over conventionally accepted values of life.
Putting our results together with earlier work suggests that malpractice may have
substantial impacts on the care and costs of specific patient subgroups — like heart attack
patients — but much more modest impacts on the average patient, and on health care spending as
a whole. Future research should endeavor to determine whether tort reform can be targeted
toward these subgroups in a cost-effective manner.
Another important avenue for future work is to evaluate whether malpractice has effects
on more fine-grained outcomes in the health care system, such as morbidity, disability, or the
nature of care delivery. Medical costs and mortality are likely to be the first-order costs and
benefits of changes to the malpractice system, but the auxiliary effects may be quite significant.
If, for example, malpractice risk has had limited impacts on costs but appreciable positive
impacts on average outcomes other than mortality, the malpractice “crisis” may be anything but.
If, on the other hand, it has negative impacts on outcomes, the major costs of malpractice may be
in health rather than in dollars.
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