Thursday, April 24, 2008

Arizona's Addiction to Unhealthy Government Handouts 

Governor Napolitano Ignores the Real "Cost Shift"

By John R. Graham

Categories:  Arizona, Medicaid, SCHIP

I wonder why the Wall Street Journal insists on running op-eds that are sure to infuriate its loyal readers (like myself).  This morning, Arizona Governor Janet Napolitano trotted out the tired old argument that President Bush is unfairly tightening the screws on states' social programs, especially state children's health insurance programs (SCHIP) and Medicaid.

Gov. Napolitano's wants to talk about "Washington paying its bills."  In her worldview, "the beauty of SCHIP is that its a federal-state partnership," and President Bush's policy of demanding that states to enrol kids in families below 250% of the Federal Poverty Line before giving those states more of our money means that "states must now carry the additional burden of providing health care for these children."

Arizona ranks a miserable 42 out of 50 in the U.S. Index of Health Ownership's ranking of government health programs.  It is truly dependent on residents of the other 49 states (or at least 41 of them) to finance its profligacy.  So perhaps it's not surprising that Gov. Napolitano is desperate to keep her states' place at the trough.

Her op-ed is perfectly co-ordinated with the Democratic Congressional majority's attack on the President's proposed regulations to impose fiscal responsibility on Medicaid and prevent states from gaming the system.

Do these people really believe that the federal government has a source of money that the states do not have? Or if taxpayers in Arizona want to subsidize health care for fellow citizens, that it makes more sense to send their taxes to DC first, and back to Arizona only after the Center for Medicare & Medicaid Services in Baltimore has taken its cut?

Of course not: They just want you to think that when the state government makes the federal government pick your right pocket, instead of the state picking your left pocket directly, you are somehow being "relieved of the burden" of paying for other people's health care.

I have written that the federal government must drastically change the way it funds Medicaid.  The current mechanism virtually guarantees that states will spend beyond our means. 

The real "cost shift" is from taxpaying citizens to bloated government health care.  And Gov. Napolitano's op-ed demonstrates that perfectly.

• posted by John R. Graham
• 3:16 pm
• 0 comment

Thursday, September 27, 2007

If it's Universal, its Coercive 

Arizona ballot measure

By John LaPlante

Categories:  Arizona

Clint Bolick, head of the Center for Constitutional Litigation at the Goldwater Institute, writes on the Arizona ballot measure I mentioned yesterday.

Here's the key: "Health insurance isn't "universal" if people are allowed to opt out or choose options not allowed by the government.

To take an example, consider Social Security: It's certainly a "universal" plan. Can you get out of it? No way.

• posted by John LaPlante
• 1:21 pm
• 0 comment

Wednesday, September 26, 2007

A Constitutional Right to Health Care Freedom 

Arizona initiative underway

By John LaPlante

Categories:  Arizona

Instead of just fending off one threat health care freedom, some folks in Arizona are working to enshrine it in the state's constitution.

Two doctors launched an initiative drive Tuesday to preclude lawmakers, or even voters, from ever requiring Arizonans to buy health insurance.

The proposed amendment to the Arizona Constitution would bar approval of any law "that restricts a person's freedom of choice of private health-care systems or private plans of any type."

The measure, if approved by voters next year, would prohibit the state from imposing any penalty or fine on anyone because of the type of insurance he buys, or if he chooses not to buy coverage at all.

(Source: Arizona Daily Star)

Another group, coy about its strategy, struck first with the idea of a constitutional amendment via initiative. Give physicians Jeffrey Singer and Eric Novack credit for saying, in effect, "We'll call your chips and raise you."

Another story gives more information on the plan.

• posted by John LaPlante
• 10:43 am
• 0 comment

Friday, September 7, 2007

How Many Kids Could An SCHIP Cure, If An SCHIP Could Cure Kids? 

A lot fewer than claimed in a recent medical journal article from Arizona!

By John R. Graham

Categories:  Arizona, SCHIP

Tucson’s Arizona Daily Star recently ran an op-ed by a pediatrician, Dr. Kevin Dveirin, who is very upset about President Bush’s proposed new rules requiring states to enroll 95 percent of poor kids in state children’s health insurance programs before signing up middle income kids. And he makes an apparently reasonable case. Or does he?

According to Doctor Dveirin, “A recent study of Arizona children reported in the journal Pediatrics showed that for every 1,000 children enrolled in AHCCCS (the state Medicaid program) and KidsCare, there were 300 fewer ER visits and 1,000 fewer hospital days per year. This resulted in a communitywide medical-cost savings of more than $2,000 per year per child enrolled.”

Dr. Dveirin kindly provided me the precise reference, which reads a little different than the op-ed. Rather than discussing an actual change in policy, the article reports a simulation, whereby the researchers looked at the behavior of currently uninsured kids in Phoenix, AZ, compared it to kids enrolled in KidsCare (Arizona’s Medicaid/SCHIP expansion) and used high-falutin’ statistical methods to determine what would happen if 10 percent of the KidsCare kids became uninsured.

The conclusion? They would be less likely to see primary care physicians, resulting in delayed care, increased ER use, and avoidable hospital admissions. So, Dr. Dveirin’s statement certainly maintains the spirit and numbers of the conclusions – but they are modeled projections, not historical fact.

Further, the article makes (at least) one stated and one unstated assumption that tremble under scrutiny.

First, they assume that all of the kids who leave KidsCare become uninsured, despite citing Cunningham, who figured that, because some ex-SCHIPers would become privately insured, ER visits would not increase. Further, Gruber concludes that 60 percent of SCHIP enrolment comes from crowding kids out of private health insurance. So, it is quite unrealistic for the Arizona authors to model zero return to private insurance.

Second, because of federal EMTALA (Emergency Treatment and Active Labor Act) and state laws to prevent “patient-dumping” (which have likely failed, but that is for another post), ER care is “free.” There is little incentive for families with kids who are otherwise healthy, but might perhaps suffer an acute illness, to demand effective and low-cost private health insurance. If the kid ends up in the ER, and perhaps even admitted, the hospital will send the bill to the government in any case (with a lot of flailing and screaming about “uncompensated care”), whether he’s enrolled in government health care or not.

So, Arizonans need not be afraid that a fiscally disciplined KidsCare program will send hordes of kids into their ERs – especially if they can convince their legislators to reform hospital regulation and payment, too!

• posted by John R. Graham
• 7:43 pm
• 0 comment

Thursday, August 16, 2007

Hospital Price Transparency: One Step Backward in Arizona? 

A verdict shows where the blame for crazy hospital pricing lies: the State

By John R. Graham

Categories:  Arizona

An Arizona appeals court yesterday upheld a judgment against Medical Savings Insurance Co. (MSIC) and seven patients, who claimed that Banner Health, a hospital chain, had price-gouged them. MSIC, which insured the patients, did not have a contract with Banner Health. Banner, therefore, required the patients to sign a Conditions of Admission form, whereby they committed to pay the “…usual and customary charges, which are those rates filed annually with the Arizona Department of health services…”

MSIC and the patients claimed that the charges they received were well beyond “reasonable and customary.” Indeed, MSIC produced evidence from Banner Health that real charges were only 20 percent of those billed to its members! This is credible: these patients, because they did not benefit from a network discount, were invoiced directly from the “chargemaster,” the hospital’s list of prices. Recent national evidence shows that hospital chargemaster prices are so absurdly high that hospitals only collect one in six dollars they charge uninsured patients [A. Dobson, et al., “The Cost-Shift Payment ‘Hydraulic’: Foundation, History, And Implications,” Health Affairs 25, 1 (2006):22-33].

I have previously made great hay about hospitals’ refusal to disclose prices before treatment. However, since the moderator of this forum has prodded me to cool my rhetoric, I’ll point out that Arizona is different than most states. The law requires hospitals to make the chargemaster “available for inspection by the public at all times.” MSIC and the patients did not claim that Banner Health failed in this, so it looks like the patients should, indeed, have understood their financial responsibility when they entered the Banner hospitals.

So who’s the culprit? Arizona law requires hospitals to submit their prices to the state bureaucracy, and does not permit a hospital to reduce its rates. Furthermore, these are not prices for “episodes of care”, but mind-numbing itemized figures. Judge Kessler’s dissent noted that the “filed rates” are 576 pages of procedures and prices, including, for example, a charge of $2,140 for a “shaft, femoral, 15.9 cm” but only $1,968 for a “shaft femoral VFEMS70SP”!

How could anyone reasonably be held responsible for paying a “reasonable and customary” charge from such a dog’s breakfast of a price list?

Which way out of this hospital pricing mess? States must quit legislating chargemasters, “reasonable and customary” charges, and other hospital pricing policies. Other things have to change too, especially the Medicare Prospective Payment System, which has created the unwieldy itemized pricing mechanism.

Simply make hospitals (and insurers) subject to the same contract law as everybody else: if you refuse to negotiate the price of a good or service before you deliver it, you’re going to have to negotiate it after.

• posted by John R. Graham
• 8:20 pm
• 2 comments

Thursday, May 31, 2007

"Free" Health Care for $60,000-income Families 

Arizona governor contemplates bigger proposal next year

By John LaPlante

Categories:  Arizona

If at first you don't succeed, ask for more.

That seems to be the tactic of Gov. Janet Napolitano (D-Arizona), who wants the state to offer health insurance coverage to families with an income of up to $60,000 per year. Advocates of the move, including Families USA, are touting the advantages of federal matching funds, which might also be called the crack cocaine of state ambition. In the words of the Arizona Star,

Since the federal funding formula calls for states to put up $1 for each $3 in federal money, claiming the extra funds [Families USA] referenced would require more than $350 million extra in state funds over five years, or $70 million a year.

Napolitano sought just $2.2 million for half of the coming budget year. But her staffers acknowledged the cost would grow as word of the expanded program got out and more people joined.

"The Legislature had some problems with that," Napolitano conceded. But the governor said this year's fight left an impression -- and a resolve to seek even more next year.

Fortunately, at least one legislative leader has a better idea. House Majority Leader Tom Boone, R-Peoria, would like to strip some of the mandates out the state's insurance law. Such an approach, he says "would be a lot less expensive. It would just be like a basic major-medical policy, which currently no insurers in the state of Arizona can offer."

Thomas C. Patterson, chairman of the Goldwater Institute, offers an alternative to centralizing health care in a government program.

• posted by John LaPlante
• 11:09 am
• 0 comment