Monday, December 29, 2008

Should we return to the Certificate of Need (CON)?

In the 70s and 80s many states had health care Certificate of Need (CON) laws.

In generally, the CON required state approval for the construction or major renovations of hospitals, the construction or major renovation of nursing home beds, and the addition of major technology, such as imaging centers.

The laws varied by state so the generalization did not apply exactly to each state. I believe there may be four (4) states that have retained CON laws (one being Michigan).

When I was young and naïve I believed the CON was based on the formulas built into the law. After some experience I learned that in the states I worked the CON process was rotten with politics, money and influence peddling.

Many states repealed the CON rules because the process did not work, or as a deregulation maneuver.

The market did actually work in one instance, nursing home beds are not being built despite the absence of CON laws, largely because seniors housing and assisted living centers have created a continuum of care that minimizes the need for nursing home beds.

So should we allocate health care capital via the government? What happens to the political losers? Would this slow capital spending, and is that a good thing? How do we keep rotten politics out of the process?

Sunday, December 21, 2008

Nursing Home Rating System

The federal Department of Health and Human Services, Center for Medicare and Medicaid Services, has instituted a "five star" nursing home rating system.

The idea is to provide useful information to families and residents, consumer advocates and government officials.

Having spent 30+ years involved with nursing homes, and having been involved in all phases of the regulatory system, I am skeptical.

To be fair, CMMS includes the weaknesses in the rating system in the narrative explaining the system.

Nursing homes are the most highly regulated sector of the health care system, and are targets for consumer advocates, bureaucrats and on-the-make politicians.

Some snowy afternoon I am going to spend a few hours looking at some homes I am familiar with, and see if the rating system has any connection to reality.

Friday, December 5, 2008

Say it Ain't So!!!

From the Wall Street Journal, December 5, 2008

Daschle Launches Push for Health-Care Overhaul (excerpt)

"Mr. Daschle, who Obama transition officials say will be nominated secretary of Health and Human Services, will suggest that Americans hold holiday-season house parties to brainstorm over how best to overhaul the U.S. health-care system. He will promise to drop by one such party himself, and to take the ideas generated to President-elect Barack Obama."

Worst idea ever?

Thursday, December 4, 2008

Health Care and Stimulus

I am still working my way through the Baucus white paper, and promise a summary soon.

While you wait, Jonathon Gruber has some interesting ideas about health care and economic stimulus (hat tip to Mark Thoma, and copyright the New York Times).

I do not exactly follow some of Gruber's numbers, but it is worth a read, and he clearly understands the there are issues at the state level.

Also, Gruber implies laid off workers can fill the gaps in primary care by becoming nurse practitioners, RNs and physicians assistants. Ah, maybe with five or six years of education, not exactly a short term fix.

Wednesday, November 19, 2008

Job offer - Secretary of HHS

from the Associated Press ( (c) 2008)

WASHINGTON – Former Senate Majority Leader Tom Daschle has accepted President-elect Barack Obama's offer to be Secretary of Health and Human Services, Democratic officials said Wednesday.

The appointment has not been announced, but these officials said the job is Daschle's barring an unforeseen problem as Obama's team reviews the background of the South Dakota Democrat.

One area of review will include the lobbying connections of his wife, Linda Hall Daschle, who has lobbied mostly on behalf of airline-related companies over the years. The officials spoke on condition of anonymity because they weren't authorized to discuss the matter publicly.
Daschle was a close adviser to Obama throughout the former Illinois senator's White House campaign.

He recently wrote a book on his proposals to improve health care, and he is working with former Senate leaders on recommendations to improve the system.

Organizations seeking to expand health coverage were quick to praise the selection.

Tuesday, November 18, 2008

Physician Foundation Report 11/18/08

The Physicians’ Foundation was founded in 2003 with settlement funds from a major lawsuit against Aetna (long story).

The PF issued a report this morning after reviewing 12,000 survey responses from practicing physicians.

The conclusions about medicine in general and primary care in particular in the U.S. are very grim.

 Many physicians plan to retire early

 Many physicians are looking for non-clinical jobs.

 Many physicians plan to cut back on patient loads.

 There is too much paperwork.

 Some physicians want to cut back to part-time.

(There is another topic lurking here, but it is very sensitive, and will be covered in another post).


None of this surprises me. All of it is true.

Physicians tend to grumble a lot.

Those with negative opinions may have been more likely to answer the survey.

We need more primary care physicians, but primary care is not all that attractive.

More later.

Monday, November 17, 2008

What I Have Been Reading - Part I

This last spring I made a commitment that ultimately required me to read just about everything current on health care reform. Good grief!

The exercise was tiring but ultimately very worthwhile.

I have carved the various readings into categories and will occasionally post a category.

Here - important and/or interesting books. If you can read only one, I guess I would recommend Cutler, he seems to be close to the Obama track.

No endorsement of any of these books is implied, except to say that all added value to my readings.

I get most of my books now used at or (being cheap). Lot’s of Harvard professors here.

Your Money or Your Life: Strong Medicine for America's Health Care System
David M. Cutler, Harvard University
Oxford University Press U.S. (2005)
(Prof. Cutler has recently written some columns with Brad Delong.)

Redefining Health Care:
Creating Value-Based Competition on Results
Michael E. Porter, Harvard Business School
Elizabeth Teisberg, Graduate School of Business, University of Virginia
Harvard Business School Press, 2006

Market Driven Health Care:
Who Wins, Who Loses in the Transformation of America’s Largest Service Industry
Regina Herzlinger - Professor of Business Administration - Harvard
Perseus Books
1997 (paperback available)

Pricing the Priceless: A Health Care Conundrum (Walras-Pareto Lectures)
by Joseph P. Newhouse – Harvard Kennedy School
MIT Press (2004)

Saving Lives and Saving Money: Transforming Health and Healthcare
Gingrinch, Pavey and Woodbury
The Alexis de Tocqueville Institution (2003)

Thursday, November 13, 2008

President-elect Obama on electronic records

from the website


(1) INVEST IN ELECTRONIC HEALTH INFORMATION TECHNOLOGY SYSTEMS. Most medical records are still stored on paper, which makes them difficult to use to coordinate care, measure quality, or reduce medical errors. Processing paper claims also costs twice as much as processing electronic claims. Barack Obama and Joe Biden will invest $10 billion a year over the next five years to move the U.S. health care system to broad adoption of standards-based electronic health information systems, including electronic health records. They will also phase in requirements for full implementation of health IT and commit the necessary federal resources to make it happen. Barack Obama and Joe Biden will ensure that these systems are developed in coordination with providers and frontline workers, including those in rural and underserved areas. Barack Obama and Joe Biden will ensure that patients’ privacy is protected. A study by the Rand Corporation found that if most hospitals and doctors offices adopted electronic health records, up to $77 billion of savings would be realized each year through improvements such as reduced hospital stays, avoidance of duplicative and unnecessary testing, more appropriate drug utilization, and other efficiencies.

Wednesday, November 12, 2008

News from Congress - follow up later

from this morning


The report runs 98 pages, so you may want to wait for the summary!

Baucus To Release Call For Health Care Reform

(RTTNews) - The calls for President-elect Barack Obama to move quickly on health care reform will strengthen Wednesday with a call from the head of the powerful Senate Finance Committee, Sen. Max Baucus (D-Mont).

Baucus will unveil a "white paper" report titled "Call to Action: Health Reform 2009" at a Washington news conference.

The package will recommend policy changes in numerous areas "as a means of achieving a goal of affordable, accessible health care for every single American," Baucus' office said Tuesday.
The Finance Committee oversees major parts of the nation's health care system, including Medicare, Medicaid and the Children's Health Insurance program. It also carries jurisdiction over all tax policy changes, including those affecting the health care system.

The Baucus package joins a growing call to Obama to act quickly on health care reform.
On Tuesday, a group of four major advocacy organizations - the Business Roundtable, the National Federation of Independent Businesses, the AARP and the Service Employees International Union - sent a letter to the President-elect urging that health care reform be a priority for the administration in its first 100 days in office.

"Addressing skyrocketing healthcare costs is a critical component of stabilizing household, national and global economies," the letter said. "Inaction undermines the economic security of our families; limits the productivity of our workforce; stagnates job creation and wage growth; and threatens to crowd out investments in energy, education and infrastructure

The advocacy groups are planning a $1 million dollar marketing campaign to push the reform movement in the coming weeks............................

Sunday, November 9, 2008

Have a question? Topic?

Feel free to email me suggested topics or questions.

I will do my best to post on topics or answer those questions.

This blog will focus on the the finance and administration of health care, with an emphasis on what reform might do to the front lines of health care (an area neglected by economics, think tankers, etc.).

Welcome - A New Era

In the 2008 election both presidential candidates promised dramatic health care reform.

President-elect Obama has promised change, and the leaders of Congress may advocate for much more dramatic reform than the President. Something is going to change, and soon!

This web log or "blog" is a small effort to discuss quality, financial and administrative matters related to health care reform.

All opinions are those fo the author/blogger.