Friday, November 27, 2009

DeParle's Health Reform: Twelve Years Back in Time


White House Health Czar Nancy-Ann DeParle spoke alongside Peter Orzag on health reform's cost containment measures.


DeParle added that it had been twelve years since any real cost containment had been attempted in health care, and it was successful, and that the current reforms would bring back lots of these cost-containment items.
Only they've been renamed. Health maintenance organizations are rebranded as "accountable care organizations." Capitation is now "bundled payment."

Why did managed care decline? People hated plans' restrictive panels and gatekeeper requirements. Providers hated bonuses based on utilization measures and restrictive clinical parameters.

Health reform will incentivize doctors on "quality," i.e. measures eerily similar to those used twelve years ago. Pay for performance has a clear track record over the same period. Executives cheated on a widespread basis on stock option incentive pay, supposedly the most pure form of pay for performance. Surely, doctors and nurses are as smart as corporate chiefs.

My prediction is business and government will continue shifting responsibility for health care to the individual. Corporations badly want to jettison that pesky health insurance benefit. Uncle Sam is tapped out. Look for any reform to go the way of TriCare, with its endless cycle of increased premium sharing, higher deductibles and co-pays.

The administration offers broad statements on reform like:


Moving to a system where providers are paid for overall care – not for each test or procedure they perform.

The chart above shows providers are paid a myriad of ways, capitation, per diems, DRG's, discounted fee for service, and no pays. The current system does not pay for each test or procedure performed. The Obama team is intellectually dishonest in this regard.

The 30,000 foot view shows:


1. Rebranded managed care

2. People having to buy insurance, which over time will shift greater and greater responsibility to the individual.

3. Distorting pay for performance

4. Misrepresenting provider payment

Hold on to your doctor and your wallet. Deform is coming.

Update 4-19-11: Accountable Care Organizations focus on utilization hearkens back to days of widely hated managed care.

Update 8-5-14:  Restrictive provider panels have been rebranded Narrow Networks under PPACA.  Same as it ever was...

Update 9-2-15:  As healthcare costs skyrocket employees get to pay more for less coverage, with the prospect of paying a luxury tax for worse insurance.

Update 10-3-15:  A premium increase of 60% is bending the cost curve in the wrong direction.  Who will hold Nancy Ann DeParle, Peter Orszag, Nera Tanden, Stephanie Cutter, Ezekial Emanual and other PPACA architects responsible?  Most are now making big money in the private sector.  One can only hope their insurance soared by 60% or more.

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