Merrill Matthews, Jr.
Merrill Matthews Jr., Ph.D., is a resident scholar with the Institute for Policy Innovation. He is a public policy analyst specializing in health care, Social Security, welfare and Internet issues, and is the author of numerous studies in health policy, as well as other public policy issues. He is past president of the Health Economics Roundtable for the National Association for Business Economics, the largest trade association of business economists, and health policy advisor for the American Legislative Exchange Council, a bipartisan association of state legislators.
Dr. Matthews serves as the medical ethicist for the University of Texas Southwestern Medical Center’s Institutional Review Board for Human Experimentation, and has contributed chapters to two recently published books: Physician Assisted Suicide: Expanding the Debate (Routledge, 1998) and The 21st Century Health Care Leader (Josey-Bass, 1998).
He is a “Brain Trust” columnist for Investor’s Business Daily and has been published in numerous journals and newspapers, including The Wall Street Journal, Barron’s, USA Today and The Washington Times. He is the political analyst for USA Radio Network and an occasional commentator for National Public Radio.
Dr. Matthews received his Ph.D. in Philosophy and Humanities from the University of Texas at Dallas.
Thursday, November 20, 2008Can Government Reduce Premiums by 20 Percent?Only through creative accounting By Merrill Matthews, Jr.President-elect Barack Obama says his plan to ensure universal health-insurance coverage will lower family premiums by about $2,500 a year by the end of his first term - a roughly 20% reduction in the $12,000 cost of an average comprehensive family health-insurance policy.While most health economists agree there is waste in the system - perhaps as much as 30% - the question is where is it and how to remove it? The Obama team suggests at least three areas for savings: -- Computerizing medical records would save $77 billion. -- Reducing administrative costs would cut out $46 billion. -- Improving prevention and chronic disease programs would reduce spending by $81 billion. How did Mr. Obama come up with those figures? Is he inflating those numbers? The New York Times published a story recently outlining how some of his advisers reached these conclusions. Let's just say the process wasn't what you'd call academically rigorous. And it's certainly not the kind of hard numbers one would want to build a health care reform campaign around - unless no one is willing to exercise the audacity of inquiry. Take Mr. Obama's $77 billion savings on computerizing medical records. The campaign pulled this figure from a study by the well-respected RAND Corp., which says that widespread (90%) adoption of health information technology would cost perhaps $8 billion a year to implement, but "annual savings from efficiency alone could be $77 billion or more." But the study goes on to say, "Because process changes and related benefits take time to develop, net savings are initially low at the start of the 15-year period, but then rise steeply." In other words, no help early on. And now the Congressional Budget Office has raised questions about whether aggressive efforts to adopt health information technology would create any significant savings. Of course, the fact is doctors and hospitals are increasingly computerizing their medical practices on their own - or at least mine are - without threats from the government. Even shakier is Mr. Obama's hope of saving $46 billion in administrative costs. Government-run health care proponents claim that Medicare has a 2% administrative cost, while private health insurers spend 20% or 25% - or more. Both numbers are wrong. As the Council for Affordable Health Insurance showed in a study by a Milliman actuary, that 2% is simply the cost of processing Medicare claims. The figure doesn't capture rent on the buildings, management, monitoring for fraud, etc. - all the things that private insurers must include in administrative costs. Medicare's real administrative costs are nearly three times the official figure, while the administrative costs of large groups in the private sector, which can maximize economies of scale, are only a little higher than Medicare's. Finally, with regard to prevention and chronic disease, about 75% of our health care dollars go toward such diseases as obesity, high blood pressure, diabetes, cancer and others. Since many - though clearly not all - of the chronic diseases can be a result of lifestyle choices, getting people to change their behavior could significantly reduce total health care spending and improve quality of life. But how do we do that in a free society? Many employers and insurers are taking a carrot approach, exchanging premium reductions or other perks when employees participate in certain measures or programs. The government, by contrast, tends to use a stick - and a pretty big one at that. Former presidential candidate John Edwards, for example, proposed requiring everyone to get preventive care and an annual physical. To be sure, we can and should improve in the area of prevention and chronic care management, which could both improve health and save money. But be very skeptical of any proposal that claims it can save $80 billion a year. People just aren't that fond of tofu. What Mr. Obama's plan really lacks - and why it will certainly fail - is a way to get the economic incentives aligned correctly so that consumers have a reason to be value-conscious shoppers in the health care marketplace. Instead, he distorts incentives even more than they are by imposing more mandates, regulations and price controls. We probably can cut health insurance by $2,500 a year, as Mr. Obama suggests, but only by giving consumers, not bureaucrats, more control over their health care dollars.
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Friday, October 24, 2008Massachusetts Tightens Mandate on BusinessesBy Merrill Matthews, Jr.Categories: MassachusettsIn Massachusetts, the Division of Health Care Finance and Policy (DHCFP) recently adopted revised employer "fair share" regulations, effective January 1. The new rules will require employers with 50 or more full-time or equivalent workers to pay at least 33 percent of their workers' premiums and ensure that at least 25 percent of their workers are covered by the employer's plan. The current rule, proposed by the Romney administration, requires employers with 10 or more employees to meet one of these two requirements, but not both. DHCFP initially proposed to extend the rule change to these very small employers, but met fierce public resistance from business groups, including those representing retailers and restaurants. Non- complying employers must pay the "fair share" penalty of $295 per worker. The change is expected to impact thousands of small employers who currently meet the existing "either/or" rule standard, but not the higher threshold under the new rule.
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Wednesday, October 22, 2008Florida Medicaid Chief Recommends Pilot Project ExpansionBy Merrill Matthews, Jr.Categories: Florida, MedicaidIn the face of a slackening state economy and a growing budget deficit, the Agency for Health Care Administration, the state's Medicaid regulator, has recommended expanding a Medicaid pilot project initiated by former Governor Jeb Bush (R) to 20 more counties, including Miami-Dade. The project, which now operates in five counties under a federal Medicaid waiver, requires beneficiaries to enroll in managed care plans, but also offers greater choice among private Medicaid plans. The request includes an increase in Medicaid payments for specialists to increase access. Governor Charlie Crist (R) declined to push for expansion earlier this year, based on a recommendation from then-AHCA Secretary Andrew Agwunobi. Agwunobi's successor, former State Representative Holly Benson, has been a strong advocate of the Bush-era Medicaid reforms. Governor Crist will decide in the coming months whether to urge lawmakers to approve the expansion in the 2009 legislative session.
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Tuesday, October 21, 2008Arizona Ballot Measure May be a Model for OthersBy Merrill Matthews, Jr.Categories: Arizona, WisconsinSince the introduction of Proposition 101 in Arizona, the initiative has been considered in Wisconsin, and may be discussed at the upcoming American Legislative Exchange Council (ALEC) meeting in Washington, D.C. It has the potential to change the debate from a focus on what government can do to keeping government out of our private decisions. It would
A "yes" vote shall have the effect of prohibiting laws that restrict a person's choice of private health care systems or private plans, interfere with a person or an entity's right to pay for lawful medical services, and impose a penalty or fine for choosing to obtain or decline health care coverage or for participation in any health care system or plan. A "no" vote shall have the effect of retaining the current law regarding a person or entity's health care choices.
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Friday, October 10, 2008"High Performing" Employers Use HSAs to Keep Costs LowBy Merrill MatthewsCategories: HSAs, etc.Towers-Perrin has issued another study of "high- performing" versus "low-performing" employers when it comes to health benefits. On average, the employers surveyed spent $9,660 per employee on benefits. However, this amount varied by 20 percent depending on the practices followed by the employer. The study finds that employees as well as employers in high-performing companies save money, so it isn't just a matter of cost-shifting. The study notes, "High performers also show success in holding down costs across all plan types. Notably, high performers offering account-based health plans (ABHPs) with a health savings account (HSA) feature are keeping the total per-employee cost under $6,700 -- a figure well below the low-performer cost ($7,584), as well as overall costs for other plans." These employers do not rely solely on plan design for results but also a lot of employee engagement, wellness programs, clear communications, and performance metrics. The high-performing plans also tend to prefer HSAs over HRAs because they want to encourage employee wealth accumulation in preparation for retirement.
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Thursday, October 9, 2008Maine Health Program: Cost Savings UnderwhelmingBy Merrill MatthewsCategories: MaineThe Dirigo Health program in 2007 saved Maine's health care system $48.7 million -- a much lower amount than the $149.8 million estimate approved by the Dirigo agency board in July, according to a formal determination by Insurance Superintendent Mila Kofman. Dirigo's enabling legislation allows the state to assess health insurers with savings offset payments (SOP) up to the amount of savings generated by the program, capped at 4 percent of paid claims. Last year, the board set the SOP at $32.8 million, or 1.74 percent of paid claims. Kofman reduced suggested hospital savings initiatives from $119.4 million to $40 million; she reduced credit for uninsured/underinsured savings initiatives from $23.6 million to $6.1, and she deleted $4 million she identified as double-counting. In April, the legislature sought to replace the SOP with a 1.8 percent surcharge on paid claims and tax increases on beer, wine, and soda (L.D. 2247), but these taxes are on hold pending the outcome of a citizen-initiated referendum to repeal them to be voted on in November.
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Wednesday, October 8, 2008Massachusetts Program: More Coverage, Less CareBy Merrill MatthewsCategories: MassachusettsMore than 340,000 Massachusetts residents have gained health insurance since 2006 under the state's landmark health care reform law. But residents are now waiting longer for appointments. Doctors and consumer advocates report growing difficulties among patients vying for care, and for physicians trying to squeeze them in. Some doctors are shutting their doors to new patients. In its annual physician survey, the Massachusetts Medical Society, the state's largest physicians group, found that among 100 internists the average wait time for an appointment for a new patient is now 50 days, with some waits up to 100 days. In 2004, the average wait time was 47 days and the longest wait was 87 days. The medical society also found that fewer primary care doctors are taking on new patients; 42 percent of internists surveyed have closed their practices to them, compared with 33 percent in 2004. The waits for appointments with obstetrician/gynecologists and family practitioners also have generally increased. Access to internists and family practitioners is especially difficult in western Massachusetts and on Cape Cod, but Boston, too, is feeling the squeeze, according to the Boston Globe. Bay State physician shortages illustrate the law of unintended consequences in action: The state's reform law now extends coverage to more residents, as intended, but getting it through a state-imposed guaranteed issue market hardly guarantees access to timely medical care from practitioners who are truly capable of handling substantial increases in their patient rolls. In the meantime, Governor Deval Patrick (D) announced on September 30 that the federal government will extend the Commonwealth's Medicaid waiver, allowing the state to continue to extend access to coverage under its reform law through a three-year, $21.2 billion agreement. The pact, expected to be formalized in the coming weeks, commits federal taxpayers to $11 billion in subsidies to state residents who earn up to 300 percent of the federal poverty level, or $63,600 annually.
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Wednesday, September 3, 2008Expanding Medicaid Won't HelpBy Merrill Matthews, Jr.Categories: Medicaid, New YorkAdding people to Medicaid is a favorite tactic of some politicians, but many patients already enrolled in Medicaid can't get medical care. Administrators have made major cuts to reimbursement rates, to the point that many physicians lose money on Medicaid patients. In New York, for example, physicians earn just $20 for 60-minute consultations with Medicaid patients. This is just a fraction of what private insurers pay. Consequently, more than a fifth of doctors nationally won't accept new Medicaid patients, according to the Center for Studying Health System Change. Adding millions more to Medicaid would exacerbate the program's problems. Sure, more Americans would be "insured." But what good is insurance if you can't find a doctor?
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Wednesday, August 20, 2008Government Obesity in ActionBy Merrill Matthews, Jr.Categories: California, Nanny StateA Los Angeles city councilwoman thinks Angelenos are too fat. So she’s pushing legislation that bans new fast food restaurants like McDonalds and KFC. Of course, there’s already some 400 fast-food restaurants in the targeted area. So the bill doesn’t eliminate access to fast food.
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Thursday, August 7, 2008One More Second Opinion to "Sicko" & Single-PayerBy Merrill Matthews, Jr.Categories: Single-Payer Follies(The following op-ed appeared today in The Olympian) The slow-boiling national debate over health care naturally leads people to look at England, Canada and other government-run systems as potential role models for sweeping reform in the United States. Activist filmmaker Michael Moore is by far their most visible advocate. The millions who saw his documentary "Sicko" came away with the impression that England is a health-care utopia. They were told that doctors in such single-payer systems made good salaries, had nice homes and drove expensive cars. Their patients, of course, were very satisfied. But anyone who reads the British press over a period of time will develop a more balanced view - in reality England's National Health Service is known for its long waiting lines, angry patients, rationed and often sub-quality care.
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