This paper is an important addition to the work of John Wennberg and his colleagues at Dartmouth on regional variation in spending in the Medicare program. It separates the variation in use of services by individuals with comparable health status from other factors that influence spending, especially Medicare payment policies.

For most individuals and families, the Senate health care reform bill will have very little impact on the premiums to be paid for health plans.

This act by Aetna indicates the level of sincerity the insurance industry has in its alleged new effort to cooperate in ensuring that everyone has the health care coverage that they need. Aetna is redesigning and repricing its products in order to dump over 600,000 of its less profitable members. They need to be sure that “each customer is priced to an appropriate margin.” And, above all, they owe it to their shareholders “to drive away sicker members.”

AHIP president Karen Ignagni says that unless lawmakers institute changes across the entire system, health care costs will continue to weigh down the economy, placing a crushing burden on employers and families. There could not be a more explicit admission that the private insurance industry is not and never has been capable of controlling our very high health care costs. Yet their administrative excesses along with the administrative burden they place on the delivery system are major sources of waste in our health care system.

Big Bad Wolf: “… and I’ll huff and I’ll puff… ”
Pig with the feasible compromise: “Oops!”

By Clay Bennett
Chattanooga Times Free Press
Thursday, Nov. 19, 2009
http://www.timesfreepress.com/news/2009/nov/19/compromise/?opinioncartoons

Regular readers of these messages are no doubt saturated with the concerns expressed about affordability of health care for individuals and families. For those who have or will have health care needs, even with subsidies, the premiums, deductibles, other cost sharing, out-of-network costs, and the costs of services that are not a benefit of the plans will be unaffordable for all but the relatively wealthy.

The Quote of the Day for November 18 was a letter to President Obama from twenty-three prominent economists urging that four specified elements to control costs be included in the health reform legislation. Following is my original response to the letter, discussing each of the four elements. Princeton economist Uwe Reinhardt, one of the signers of the letter, has responded to my comments.

As currently implemented, health information technology (HIT) has no significant impact on administrative efficiency or overall costs, even in the “100 Most Wired” hospitals. Members of Congress should quit pretending that expanding HIT will produce savings that will help pay for the increased spending called for in their legislation.

In their just released 2009 report on employer-sponsored health benefit programs Mercer seems to be celebrating the fact that this year employers have held the line on benefit cost increases. Is their optimism warranted?

For socially conscious health care reform advocates, the primary goal of reform is to see that every individual receives the health care that he or she needs, But what has really driven the reform process has been the concern over the very high costs of health care that have challenged individuals, employers and the stewards of our government health programs.