kaiser health news


Kaiser Health News: Maine Court Okays Health Plan Profit Caps

Kaiser Health News reports here:

“In a case closely watched by the insurance industry, Maine’s top court Tuesday upheld state regulators’ authority to hold down rate increases sought by Anthem Health Plans of Maine.

In its ruling, the Supreme Judicial Court said that Maine’s insurance superintendent had “properly balanced the competing interests” in arriving at an approved rate increase of 5.2 percent. The insurer, a unit of Wellpoint, the nation’s largest insurer, had sought a 3 percent profit margin as part of an overall 9.2 percent increase in health insurance rates for policies sold to individuals in 2011. It argued that state regulators’ decision to grant a 1 percent profit margin violated state law and the U.S. Constitution by depriving the company of a “fair and reasonable return.”

Wellpoint spokeswoman Kristin Binns said in an e-mail statement that the company had not decided on its next step. ”We stand by our position that filed rates need to both cover the medical costs for our members and allow for an adequate risk margin to cover unanticipated costs,” she said.

Legal experts say the company has several options, including asking the state court to reconsider its decision, or seeking to appeal the ruling to the U.S. Supreme Court.”

Read the full report on Kaiser Health News here.

Children’s Hospitals As Health Care Cost ‘Juggernauts’

A children's hospital in Calgary

Mea culpa. My only defense is that I’m not the only one.

When I/we/many of us take higher-cost hospitals to task for driving up health care spending, we tend to give Children’s Hospital Boston a pass, even though goodness knows it’s a big spender.

In fact, I just looked back at Attorney General Martha Coakley’s latest report on what drives health costs up here, and if higher spending were a race, Children’s would be a front-runner. Here’s a sample from the Coakley report — note Children’s on the far, far right:

So why don’t we see cost-minded people beating on Children’s the way they do on, say, Partners HealthCare? Is Children’s a sacred cow? When I look into my own heart, I definitely find hesitation that might best be translated as “No amount of money is too great if my own child is sick.”

But that emotional response doesn’t mean Children’s spending should be beyond scrutiny — which is why I’m thrilled to see a major Kaiser Health news series under way on the business of children’s hospitals, focused in particular on a fancy new project in Orlando, the Nemours Children’s Hospital. It’s here, it stems from a year-long investigation, and its thesis goes like this:

The battle over Nemours reflects the transformation of children’s hospitals from small, struggling charities to huge, often profitable businesses. From their humble origins more than a century ago, many of the nation’s biggest and best known children’s hospitals today are health care juggernauts with sprawling medical centers and suburban satellites, extensive real estate holdings and thousands of well-paid employees and millionaire CEOs.

The billions of dollars flowing through children’s hospitals every year pay for care for tens of thousands of kids, many of them extremely sick or suffering from chronic conditions requiring a lifetime of treatment. Hospital officials say costs are high because the care is complicated and the technology expensive. In addition, the hospitals help fund research into the causes and treatment of diseases.

But the surge in spending is also helping to fuel a multibillion-dollar building boom as hospitals add towers and beds. That in turn is spurring more spending on staff and technology, even as Washington, the states and employers grapple with budget-busting increases in health care spending. While children’s hospitals represent a small slice of the nation’s health care bill, they offer a case study of the expansive ambitions of hospital leaders and the faltering efforts of government to control spiraling costs.

And another key point: Continue reading

Why ACOs Are Like Unicorns And TV Sets

No matter how much I hear about Accountable Care Organizations, a key feature of the coming wave of cost-containing health reform here and nationwide, I still feel vaguely confused about them. Last week, the federal government issued guidelines on ACOs, making the topic even hotter but not, for me, much clearer.

So I’m deeply grateful to the excellent reporters at Kaiser Health News for their clarifications — and particularly for their analogies. They’ve just put out a new guide on ACOs, including this:

ACOs have been compared to the elusive unicorn: everyone seems to know what it looks like, but no one has actually seen one. But the health care industry has already embarked on a frenzied quest to create them as quickly as possible. Today, after many delays and false starts, the Obama administration proposed guidelines on how ACOs will work.

Here is a brief guide to what we know about ACOs.

What is an accountable care organization?

An ACO is a network of doctors and hospitals that shares responsibility for providing care to patients. In the new law, an ACO would agree to manage all of the health care needs of a minimum of 5,000 Medicare beneficiaries for at least three years.

Think of it as buying a television, says Harold Miller, president and CEO of the Network for Regional Healthcare Improvement and executive director of the Center for Healthcare Quality & Payment Reform in Pittsburgh. A TV manufacturer like Sony may contract with many suppliers to build sets. Like Sony does for TVs, Miller says, an ACO would bring together the different component parts of care for the patient – primary care, specialists, hospitals, home health care, etc. – and ensure that all of the “parts work well together.”

The problem today, Miller says, is that patients are getting each part of their health care separately. “People want to buy individual circuit boards, not a whole TV,” he says. “If we can show them that the TV works better, maybe they’ll buy it,” rather than assembling a patchwork of services themselves.

Now that, I get! And here’s an extremely useful Kaiser Health News page with a whole bouquet of useful federal links on ACOs. Now we just need a Massachusetts equivalent — if anyone knows of one, please let us know.

For gluttons, there’s also the four-minute video with Jordan Rau of Kaiser Health News discussing the ACO guidelines. And there’s a delicious KHN/Washington Post piece today about how ACOs are creating a veritable gold rush for health care consultants.