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Politics : View from the Center and Left

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To: JohnM who wrote (116552)	7/26/2009 12:27:45 AM
From: biotech_bull	Read Replies (2) of 542455

in health care, the free market just doesn’t work Can't really argue with that conclusion. Here is more support for that position - the tables at the bottom are eye-opening. And the proposal for eventual bundling with a feasible intermediary step. A Modest Proposal On Payment Reform July 24th, 2009 by Uwe E. Reinhardt In my capacity as chair of Gov. Jon Corzine’s New Jersey Commission on Rationalizing Health Care Resources, I had asked two major private health insurers what they actually paid different hospitals for a number of fairly standard medical procedures. The tables reproduced at the bottom of this blog posting exhibit their responses. These remarkable data should raise two questions in the minds of health reformers. First, what is actually meant by “a level playing field” between the proposed public health plan and private health plans, when there are much larger variations of payment levels within the private sector than there are between the public health programs (Medicare and Medicaid) and the private sector? Second, should a reformed U.S. health system go forward with this bizarre set of private-sector prices — prices that do not seem to be rooted in relative costs or any other factor besides pure bargaining power among different insurers? In this commentary I propose a way of simplifying the pricing of health care in the private sector in a way that should (1) substantially reduce the administrative cost of health insurance and (2) also be much more transparent and understandable to all parties in health care, especially in a competitive environment. The Proposal Basically, my proposal is to move our health system to a common relative value platform, for at least physicians and hospitals, to be used as a platform for charging all patients. For starters, one could use the diagnosis-related groups (DRGs) and resource-based relative value scale (RBRVS) now used by Medicare as the first-stage relative value scales, which could be refined over time on the basis of either cost or imputed value. More here healthaffairs.org

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