Adam:
You raise an important topic, one clouded enormously by the confusion about what precisely 'managed care' means. So, by assuming that managed care implies payment to physicians other than fee-for-service, the wrong expectation arises.
I do not know the precise proportion of physician incomes that arises from item for service payments, but it is very substantial. 80% of Medicare, you suggest, is FFS, and that is a very large share of the physician income pie. PPOs---preferred provider organizations---typically refer to reduced fee arrangements. HMOs, that misleading term of 1970s Republican ad executives that differed sharply from the staff model prepaid group practices of yore, applies to dogs and cats, has no clear reference. The clear distinction between prepaid (a small number of famous) group practices that typically paid salaries (and some extra payments) and individual or small group fee-for-service practice is gone. The fee schedules of public and private health insurance still make a major difference in the lives of American doctors. And, whatever diverse modes are used by Medicaid do not change that picture. The VA is another story. In fact, the real story of American medical care is that there are a number of American medical systems. One is the VA (the US's NHS with salary as the major, but not exclusive payment form). The second is America's form of continental Europe's social insurance: Medicare for the seniors and disabled, with its model closer to German and Canadian physicians than any other. Fee-for-service rewards that system for volume, but the comparison between US and Canadian physician incomes and fees shows that the control of inflation is not a function of the method of paying doctors primarily. It is about countervailing power and its structure in this comparison. The third is the poor law tradition that Medicaid used to illustrate simply. There the discounted fee-for-service plays a much stronger role than implied by the turn to managed care intermediaries. The fourth system is private health insurance, most of which uses fee for service whatever the acronym. (here it is really important to distinguish between the method of payment as opposed to who bears what risk and how much detailed regulation there is of choices of intervention both prior to care or in rejection of payments. Finally, there is the web of charity care--from the requirement of not dumping patients by hospitals seeking to avoid ER bad debt to individual canceling of bills.
I hope this is useful. I will ask Camille to send you a piece that is quite close to your concerns. Let me know if this helps. This exchange is a good example of the challenge of doing cross-national descriptive work, let alone explanatory. It reminds me of why I have been so keen to get Yale to publish our four country book.
best regards,
Ted
-----Original Message-----
From: Anglo-American Health Policy Network on behalf of Adam Oliver
Sent: Tue 2/17/2009 5:23 PM
To: [log in to unmask]
Subject: Re: FW: Medicaid and NHI - NEJM piece
Ted,
I think there is an issue within although this though, that may well be crucial to the future of the US health care system but which I don't fully understand. When I first looked at the US system, I thought fee for service dominated (and, though it does have its advantages of course, FFS can be inflationary - more so than capitated budgets as a rule).
But according to figures that I have seen, about 97% of people with employer-based insurance are in managed care plans (HMOs and PPOs), about 60% of Medicaid recipients are in such plans, about 20% of Medicare patients (mostly quite poor people, which might explain why these plans have not been so great), and the VHA (like the NHS) is a managed care plan of sorts.
I guess many plans offer discounted fee for service, but a lot of them must operate under a capitated system, right? So, how prevalent is FFS now in the US? Does it still dominate? It would be handy for me to know this (and it'd be handy for my students in my new postgrad course on US Health Policy to know this too), because if FFS doesn't dominate anymore, then it undermines the claim that cost containment can be brought about by altering the reimbursement architecture (an argument I made - possibly erroneously - in my article on the Obama proposals, which Tim seems to think might be dead anyway - but if I were President, health care would not be my most pressing concern right now either).
I'll send this message to the list, because I think these type of general discussions is partly what the list is for.
All best wishes,
Adam
________________________________
From: Anglo-American Health Policy Network on behalf of Marmor, Ted
Sent: Tue 2/17/2009 8:57 PM
To: [log in to unmask]
Subject: Re: FW: Medicaid and NHI - NEJM piece
Michael sent me this exchange. The one part that struck me as simply wrong was the notion the ffs medicare is unsustainable. By that level of generalization canadian medicare should not be working. The myth of ffs as impossible to control is not what I would have expected fromyou anna.
The absence of serious cost control in the american reform discussion is absolutely true. See the annals of internal medicine forthcoming in march: a paper by oberlander, white and myself
Regards
Ted marmor
----- Original Message -----
From: Anglo-American Health Policy Network <[log in to unmask]>
To: [log in to unmask] <[log in to unmask]>
Sent: Tue Feb 17 12:45:57 2009
Subject: Re: FW: Medicaid and NHI - NEJM piece
Anna:
Thanks for the note. Couple of thoughts in response. First, most
states are now implementing some form of managed care, at least for
women and kids. Moreover, at the top of state agenda's is trying to
figure out how to bring the aged, disabled and chronically ill into
some form of managed care as well, though there is much debate on the
best way to do this. Having varied approaches to this is one of the
benefits (I think) to a Medicaid model (as opposed to a Medicare
model). Second, my own view is that you do not need equal benefits,
but you do need some minimum level of standardized benefits.
Different states or communities could then supplement depending on the
needs of their own community. On the other hand, trying to figure out
when variation is good (and should be encouraged) and when it is bad
(and should be discouraged or simply not allowed) is a very tough
question. Finally, on the question of cost containment more
generally, I think Medicaid provides a good infrastructure for
implementing such an effort (indeed, many docs would say Medicaid is
too good at cost containment and that it needs to raise rates). But
this too is a tough one.
Thanks again,
Michael
Quoting Anna Dixon <[log in to unmask]>:
>
> Having recently visited the US and discussed the options for reform
> I think Michael's proposals seem eminently sensible. What surprises
> me is that none of the reform proposals seem to tackle head on the
> issue of cost containment.
>
> Certainly extending Medicare with its predominantly fee for service
> system would be unsustainable. It seems that public expectations
> need to be managed, particularly those who are gaining coverage for
> the first time need to be convinced that a more narrowly defined
> benefits package (based on cost effectiveness rather than
> comparative effectiveness?) with a managed network of providers
> (including gatekeeping primary care physicians paid on the basis of
> capitation?) is better for their health than a system of fragmented
> providers who over treat due to reimbursement incentives (the
> majority of group insurance plans). It was not clear from Michael's
> articles whether state programs under an expanded Medicaid would be
> required to do this or whether innovation would result in fiscally
> responsible and value driven insurance packages.
>
> It is interesting that a more devolved (i.e non federal) system of
> health care insurance is likely to be more acceptable in the US. Yet
> Michael suggests standardised eligibility and minimum benefits. The
> English NHS continues to struggle with debates about a postcode
> lottery. There is great demand for equal benefits across the
> country. Is this a basic requirement to sustain a universally
> (federally) funded health system?
>
> Anna
>
> Dr Anna Dixon
> Director of Policy
> King's Fund
>
> Direct line: 020 7307 2682
> PA: Rachel Darlington 020 7307 2692
> [log in to unmask]
>
> -----Original Message-----
> From: Anglo-American Health Policy Network
> [mailto:[log in to unmask]] On Behalf Of Adam Oliver
> Sent: 16 February 2009 21:45
> To: [log in to unmask]
> Subject: Medicaid and NHI - NEJM piece
>
> Hi
>
> Attached is a short piece by Michael Sparer on the possibility of
> expanding Medicaid to achieve universal insurance. Michael would
> appreciate your comments - his email address is [log in to unmask]
>
> All best,
> Adam
>
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