Tuesday, May 6, 2008

Florida Frees up Hospital Market, at Least a Little 

CON artists will have to fight a bit harder

By John R. Graham

Categories:  Certificates of Need (CON), Florida

One of the dopiest rules that states impose on competition in health care is Certificate of Need (CON) laws for hospitals.  Basically, CON allows entrenched hospitals to use political power to prevent new ones from opening up, in a futle attempt to contain costs.

Roy Cordato of the John Locke Foundation wrote about this in a book that I edited in 2006.  Also, the burden of CON regulation is an (inverse) measurement of the state of hospital competition in the U.S. Index of Health Ownership, for which I used research from the Washington Policy Center.  As you can see Florida ranks in the middle of the pack, but a handful of states have no CON at all!

Governor Crist has promised to sign a bill that will impose a greater bureaucratic burden on an incumbent hospital that wants to stall a potential competitor by using CON.  Even better, the incumbent will have to pay up to a million dollars if it loses its challenge.  ("Loser pays" is a principle that the U.S. needs to adopt more widely, to avoid time-wasting obstacles to innovation.)

Sure, a milion dollars is nothing for most American hospitals, and this law does not abolish CON.  Still, "let not the perfect be the enemy of the good."  It will have some effect at the margin.

Alongside the insurance reform noted today by Marc Kilmer, that's two cheers (albeit small ones) for Florida's health care.

• posted by John R. Graham
• 8:22 pm
• 0 comment

Tuesday, May 6, 2008

Florida Frees up Insurance Market, at Least a Little 

Allows "no frills" insurance policies to be sold

By Marc Kilmer

Categories:  Florida, Insurance Regulation

It seems that at least one state is moving away from the "more insurance mandate" mania that is prevalent in so many others:

Delivering on Gov. Charlie Crist's top election-year priority, the Florida Legislature on Friday approved a health insurance package to extend no-frills coverage to the state's 3.8 million uninsured.

Health insurance companies will offer policies for $150 a month or more, in exchange for an exemption from the 50-plus mandates in current law that require insurers to cover items ranging from bone marrow transplants to acupuncture.

The plans — which aren't the "Cadillac of coverage," as Crist concedes — would cover some health screenings, doctor visits and office surgeries, but not medical attention that requires a specialist or prolonged hospital stays.

It's good to see this small step towards more freedom in the insurance market. It would have been better had the state reduced its mandates on all insurance, but this bill is certainly better than what existed before. With many states considering even more interference in the market in a vain attempt to "fix" health care, Florida is blazing a path in the other direction.

• posted by Marc Kilmer
• 12:24 pm
• 0 comment

Monday, April 14, 2008

Florida Governor Touts Insurance Plan 

By John LaPlante

Categories:  Florida

Gov. Charlie Crist is traveling Florida selling his proposal to, in the words of one press account, "use the state's bargaining clout to negotiate low-cost plans with insurers."

Insurers may be heading towards a Faustian bargain if they guy into this. Expect the state government to squeeze margins in the years ahead, as officials do everything to "do something" by adding to the number of people in the program. People who sign up, by the way, could be subject to de facto rationing.

Read the comments attached to the story and you'll detect the problem with health care today: the belief that "someone else" is paying for insurance, rather than workers themselves through reduced wages or fewer economic opportunities.

• posted by John LaPlante
• 9:49 am
• 1 comment

Saturday, March 22, 2008

Cheaper Policies in Florida 

By John LaPlante

Categories:  Florida, Insurance Regulation

Here's some good news from Florida: A legislative committee is looking at reducing the number of mandates the state places on insurance policies. According to one news account, "The Senate Banking and Insurance Committee on Tuesday approved Crist's proposal that would create a system allowing people to buy coverage from two types of scaled-back plans."

On the other hand, Gov. Crist proposes letting more families buy into KidCare, a state-affiliated insurance program.

Then again, that's politics. One step forward, another (or two) back.

• posted by John LaPlante
• 5:04 am
• 0 comment

Tuesday, February 19, 2008

Rainy Day Feeling in Florida 

One-time funds to fund permanent expansion?

By John LaPlante

Categories:  Florida, Medicaid

Rainy day funds can help a state get through a short period of declining tax receipts. But Gov. Charlie Crist (R-Fla.) wants to use some of those funds to start an expansion of state-paid health care.

The governor would have the state spend $60 million on expanding the Florida KidCare program to another 46,000 children. He expects tax receipts to pick up soon, a risky gamble. But even if he's right, the expansion would be an ongoing demand on the state's taxpayers. Once the program is expanded, do you think it will actually be reduced anytime in the future?

That event is made even more unlikely by the fact that some of the funding for the expansion is picked up by the federal treasury. It's a classic example of the power of the federal match: the media glow from "helping kids" is double what it would be, thanks to taxpayers in other states, while any future $1 cut in state spending brings with it the political scorn that comes from a total decline of $2.

Rep. Aaron Bean, chairman of the House's committee on health care, cautioned against the move. According to the Palm Beach Post:

After the meeting, Bean said of the proposed program: "We're not going to send our mobile unit van to go knock on doors. We're not doing that. Before you take the money out of savings, you look at your spending habits."

Bean said the House is working on its own health insurance proposal using "market-based principles" but declined to elaborate.

 

• posted by John LaPlante
• 9:49 am
• 2 comments

Friday, February 15, 2008

More Good News In Florida 

By Michael Bond

Categories:  Florida

One aspect of making markets function better is free entry and exit of capital. Of course, we may expect that existing firms will work real hard to reduce competition. Naturally, the reason for this is to protect consumers from terrible things like WalMart’s low prices and low cost classes from the University of Phoenix. This is equally true in health care where physicians and doctors want free enterprise but don’t want to tell consumers what their fees are for various procedures. An old barrier of entry trick in health care is “certificate of need” which prevents new building of competing hospitals and other medical facilities. Good news on this in Florida:Gov. Charlie Crist wants to eliminate Certificates of Need (CON) for hospitals, and the Buzz is there's a mention of such a move buried in one of his budget recommendations. "One of the things I'd like to do is relax that process so that we get more health care providers to more Floridians in a more timely fashion," Crist said.

• posted by Michael Bond
• 1:08 pm
• 0 comment

Tuesday, February 12, 2008

Good News From Florida! 

By Michael Bond

Categories:  Florida, Medicaid

Governor Crist has appointed former Representative Holly Benson to head the agency that overseas Medicaid in Florida. Holly worked hard on shepherding Medicaid Reform through the legislature and is strong believer in free markets in health care. 

• posted by Michael Bond
• 12:38 pm
• 1 comment

Wednesday, February 6, 2008

Florida Medicaid Reform Threatened 

By John LaPlante

Categories:  Florida

"Former Florida Gov. Jeb Bush led the most ambitious and significant reform to Medicaid in the country. Since he completed his term one year ago, bureaucracy and special interests are strangling it."

That's the assessment of James Frogue, who writes in the (Jacksonville) Florida Times-Union.

The revamped Medicaid program encourages preventive medicine, and gives enrolled people a monthly sum that is risk-adjusted, based on their health condition. Counselors then help beneficiaries select from insurance plans.

But in the face of studies of questionable value, state officials have no plans to expand the program from a pilot basis in some counties to statewide coverage--even though that's called for in law.

• posted by John LaPlante
• 9:29 am
• 0 comment

Monday, February 4, 2008

Another CON Bites the Dust? 

Florida Governor Crist Makes the Right Call on Hospital Cartels

By John R. Graham

Categories:  Certificates of Need (CON), Florida

In some late-breaking news, Florida Governor Charlie Crist has proposed repealing the state’s certificate-of-need (CON) law for acute-care hospitals to “increase competition and efficiency in the healthcare marketplace,” according to a plan included in the governor’s fiscal 2009 budget. The proposal suggests licensing as an alternative to Florida’s CON law, but provides few details.

Sounds good to me: CON laws do nothing to reduce the cost of health care, and have a host of negative, unintended consequences,as described in a chapter by Roy Cordato in a recent book I edited.

Truth be told, if I were advising Florida, CON is not the problem I'd put at the top of my list of anti-competitive barriers to good health care that the state had erected. Florida suffers from CON, but other states have it worse. Although many states are fortunate enough to be completely free of CON, of those that do still carry the burden, Florida is pretty much in the middle of the pack, according to the Index of Health Ownership, with Connecticut at the bottom of the barrel.

Florida's bigger priorities, according to the Index, are the burden of mandates and regulation on private health insurance, nurse practitioner prescribing autonomy, and improving its medical-malpractice loss ratio.

Nevertheless, we congratulate the governor for taking an important step to increase his citizens' health freedom. Let's hope the legislature takes it up with enthusiasm.

• posted by John R. Graham
• 6:06 pm
• 0 comment

Monday, December 10, 2007

Medicaid Reform in Florida on Hold 

By John LaPlante

Categories:  Florida, Medicaid

Two years ago, Florida started a significant reform of Medicaid, meant to move the program in the direction of a consumer-driven system. It was put into place in five counties.

A planned expansion has been put on hold , awaiting more studies on the subject:

Agency for Health Care Administration Secretary Andrew Agwunobi said Thursday that it still might eventually expand to the entire state, but that the trial programs need to continue and be evaluated more before it does.

The agency this week gave lawmakers its priorities for the 2008 session and didn't include any move to expand the effort to overhaul Medicaid. Agwunobi said the idea simply needs to be studied more.

"This is not a statement about the long-term viability of Medicaid reform," Agwunobi said. "We simply do not feel at this point that the agency is ready to make a recommendation ... in this legislative session.

"There's more information we need to gather," said Agwunobi, who was appointed by Gov. Charlie Crist.

 

• posted by John LaPlante
• 7:43 am
• 0 comment